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higher income, more luxery goods. not rocket science.
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∙ 16y ago
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Are luxury cars normal or inferior goods?
Luxury cars are normal goods. BY definition we know that normal goods are those goods for which when income increases, the demand for that good also increases i.e, there is a direct relationship between income and demand while on the other hand inferior goods are inversely related with income in the sense that as income increases people start buying better quality product and in that sense the good for which the demand has decreases becomes an inferior good. Therefore, supposing that person A's income has increases ,in that sense his demand for luxury car would also increase as he has more money to buy a luxury car. HOPE THIS HELPED. IF YOU THINK THERE IS ANY MISTAKE IN MY UNDERSTANDING OF THE CONCEPT, FEEL FREE TO CORRECT.
Factors affecting income elasticity of demand?
The income factor affecting income elasticity of demand is weather or not goods are necessities of luxury.
The difference between essential and luxury goods?
essential-needed to survive luxury-wanted
What do people buy when the economy is bad?
When the economy is 'bad', real income is falling. When real income falls, two changes occur: 1) People tend to buy cheaper substitute goods. 2) People tend to decrease consumption of luxury goods.
Income elasticity of demand?
The Income Elasticity of Demand is used to measure how an increase or decrease in the income of consumers affects the demand for a particular product. This relationship varies depending on the type of goods.
Are luxury cars normal or inferior goods?
Luxury cars are normal goods. BY definition we know that normal goods are those goods for which when income increases, the demand for that good also increases i.e, there is a direct relationship between income and demand while on the other hand inferior goods are inversely related with income in the sense that as income increases people start buying better quality product and in that sense the good for which the demand has decreases becomes an inferior good. Therefore, supposing that person A's income has increases ,in that sense his demand for luxury car would also increase as he has more money to buy a luxury car. HOPE THIS HELPED. IF YOU THINK THERE IS ANY MISTAKE IN MY UNDERSTANDING OF THE CONCEPT, FEEL FREE TO CORRECT.
Factors affecting income elasticity of demand?
The income factor affecting income elasticity of demand is weather or not goods are necessities of luxury.
The difference between essential and luxury goods?
essential-needed to survive luxury-wanted
What do people buy when the economy is bad?
When the economy is 'bad', real income is falling. When real income falls, two changes occur: 1) People tend to buy cheaper substitute goods. 2) People tend to decrease consumption of luxury goods.
Chinese merchants traded luxury goods for?
Luxury good were traded by Chinese merchants for Spices, Teas, and Porcelain goods.
Income elasticity of demand?
The Income Elasticity of Demand is used to measure how an increase or decrease in the income of consumers affects the demand for a particular product. This relationship varies depending on the type of goods.
What is the meaning of income goods?
income goods means goods that were not used by producers. And outcome goods called produced goods
What is the relationship between producers and consumers in economics?
Producers make the goods and consumers buy and use the goods.
Suppose a customer purchases only 2 goods Can both goods be luxury goods?
The goods are deserts The goods are deserts
What is the difference between capital income and revenue income?
Revenue Income:which is earned or generated by sales of goods or services.Capital Income:Cash or goods used to generate income by investing in business or other property.Example:Investment in shares and gain on sale of asset.
What is the relationship between boycott and repeal?
A boycott is to refuse to purchase certain goods or service, and a repeal is to cancel a law. That is a relationship between the two.
What are the disadvantages in using national income?
One disadvantage of using national income is that it is often difficult to tell between final goods and intermediate goods. Another disadvantage is problems with double counting.
