Which of the following goods have a negative income elasticity of demand?
A)Cars
B)Items from Dollar stores
C)Shoes
D)Bread

Question

Quizplus · Accepted Answer

Items from Dollar stores have a negative income elasticity of demand, as their demand decreases as income increases. This is because as consumers earn more income, they are likely to shop for higher quality and more expensive goods, rather than shopping at a discount store such as a Dollar store.

Which of the Following Goods Have a Negative Income Elasticity