In the table, the income elasticity of clothing is
Answer Details
The income elasticity of clothing refers to how changes in income affect the demand for clothing. In the table, the income elasticity of clothing is given as 2.0. This means that when income increases by 1%, the demand for clothing is expected to increase by 2%. Conversely, if income were to decrease by 1%, the demand for clothing is expected to decrease by 2%. Therefore, clothing is considered a normal good as the income elasticity is positive, indicating that demand for clothing increases as income increases.
