contestada

For which product is the income elasticity of demand most likely to be negative?
A. Computer software
B. Used clothing
C. Apps for iPads
D. Bread

Respuesta :

Answer: The income elasticity of demand most likely to be negative for "B. Used clothing".

Explanation: The income elasticity of demand measures the proportion of the increase in consumption of a product resulting from a proportional change in income. Therefore, if a person has an increase in their income, they will probably buy new (unused) clothing, so the income elasticity of demand is negative.

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