The product that would likely have a negative income elasticity of demand is second-hand clothing.

Here's why:

Income elasticity of demand measures how the quantity demanded changes in response to a change in income. If a good has a positive income elasticity of demand, it means that as income increases, the demand for that good increases. These are typically normal or luxury goods, like gourmet dining experiences, high-end luxury cars, and designer clothing.

On the other hand, if a good has a negative income elasticity of demand, it means that as income increases, the demand for that good decreases. These are typically inferior goods. Second-hand clothing falls into this category because as people's income increases, they are more likely to buy new clothing instead of second-hand clothing. Therefore, the demand for second-hand clothing decreases as income increases, making its income elasticity of demand negative.

Question

The product that would likely have a negative income elasticity of demand is second-hand clothing.

Here's why:

Income elasticity of demand measures how the quantity demanded changes in response to a change in income. If a good has a positive income elasticity of demand, it means that as income increases, the demand for that good increases. These are typically normal or luxury goods, like gourmet dining experiences, high-end luxury cars, and designer clothing.

On the other hand, if a good has a negative income elasticity of demand, it means that as income increases, the demand for that good decreases. These are typically inferior goods. Second-hand clothing falls into this category because as people's income increases, they are more likely to buy new clothing instead of second-hand clothing. Therefore, the demand for second-hand clothing decreases as income increases, making its income elasticity of demand negative.

Knowee AI · Accepted Answer

The product that would likely have a negative income elasticity of demand is second-hand clothing.

Here's why:

Income elasticity of demand measures how the quantity demanded changes in response to a change in income. If a good has a positive income elasticity of demand, it means that as income increases, the demand for that good increases. These are typically normal or luxury goods, like gourmet dining experiences, high-end luxury cars, and designer clothing.

On the other hand, if a good has a negative income elasticity of demand, it means that as income increases, the demand for that good decreases. These are typically inferior goods. Second-hand clothing falls into this category because as people's income increases, they are more likely to buy new clothing instead of second-hand clothing. Therefore, the demand for second-hand clothing decreases as income increases, making its income elasticity of demand negative.

Which of the following would likely have a negative income elasticity of demand?Gourmet dining experiences.High-end luxury cars.Second-hand clothing.Designer clothing

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