The Price Elasticity of New Automobile Purchases Is About 1

question 100

Multiple Choice

The price elasticity of new automobile purchases is about 1.2.This implies that an increase of $1,000 on a $10,000 automobile will

• A)reduce the number of autos sold by approximately 1.2 percent.
• B)increase the consumer expenditures on autos by approximately 1.2 percent.
• C)reduce the number of autos sold by approximately 12 percent.
• D)increase consumer expenditures on autos by approximately 12 percent.