When incomes are rising,new car sales increase while used car sales decrease.This indicates that
A)used cars and new cars are both normal goods.
B)used cars are inferior goods and new cars are normal goods.
C)used cars and new cars are complements.
D)used cars and new cars are substitutes.
E)used cars are normal goods and new cars are inferior goods.

Question

Quizplus · Accepted Answer

When incomes rise, people tend to buy more new cars and fewer used cars, indicating that new cars are normal goods (demand increases with income) and used cars are inferior goods (demand decreases with income).

When Incomes Are Rising,new Car Sales Increase While Used Car