Problem
Boom Time for "Gently Used" Clothes 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.
a. According to the news clip, is used clothing a normal good or an inferior good? If the price of used clothing falls and income remains the same, explain how the quantity of used clothing bought changes.
b. Describe the substitution effect and the income effect that occur.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.