Demand and Income Relationship Discussion

Question:  There is a very distinctive concept related to demand that is expressed in this video. Identify and define this determinant of demand. I am not looking for your “take” on the song. What is Macklemore referring to in the song, that you have read about in the chapter on demand? Why do you think this concept relates to what you have read? Focus on the constant theme of “$20 in my pocket” to link to the factor that needs to be examined.

Demand and Income Relationship Discussion Answer

The video represents distinct determinants of demand that are non-price. First, because of the limited income, with only $20 to spent, Macklemore’s purchasing power is limited. He cannot go to buy clothes in the mainstream shops. Instead, he goes to the thrift shop where in used clothes are being offered. This thrift shop is a substitute to the high-end shops because thrift shops offer inferior goods (that are used clothes) Inferior goods are goods that decreases in demand as consumers’ income decreases.