Economics: Luxury Watches A businessman buys branded luxury watches. At an income of $10,000, he buys 2 watches in a year. When his income increases to $15,000, he buys 5 watches. He wants to know how luxury goods respond to income. A positive elasticity above 1 means luxury classification. The formula is income elasticity of demand. It measures responsiveness of demand to income. This calculation will reveal luxury watch elasticity. He uses the given income and demand data. Find the income elasticity of demand for watches.