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

Question

Quizplus · Accepted Answer

The negative income elasticity of demand for used cars indicates that as income increases, the demand for used cars decreases. This suggests that used cars are an inferior good, as consumers will switch to purchasing new cars as their income rises.

The Income Elasticity of Demand for Used Cars Is Less