|Question||a. According to news clip, is used clothing a normal good or an inferior good?
b. If the price of used clothing falls and income remains the same, explain how the quantity of used clothing bought changes.
c. If the price of used clothing falls and income remains the same, describe the substitution effect and the income effect that occur.
Most retailers are blaming the economy for their poor sales, but one store chain that sells used name-brand children’s clothes, toys, and furniture is boldly declaring that an economic downturn can actually be a boon for its business. Last year, the company took in $20 million in sales, up 5% from the previous year. Sales are already up 5% this year.