If the income elasticity of demand for used cars is less than zero, then used cars are
A) a normal good.
B) a perfectly inelastic good.
C) an inelastic good.
D) an inferior good.
E) a substitute good.

Question

Quizplus · Accepted Answer

If the income elasticity of demand for used cars is less than zero, it means that as income increases, the demand for used cars decreases. This is characteristic of an inferior good, which is a good for which demand decreases as income increases.

If the Income Elasticity of Demand for Used Cars Is