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A number of empirical studies of automobile demand yielded

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5. A number of empirical studies of automobile demand yielded the following estimates of income and price elasticities;Assume that income and price effects on automobile sales are independent and additive. Assume also that the auto companies intend to increase the average price of an automobile by about 6% in the next year and that next year's disposable personal income is expected to be 4% higher than this year's. If this year's automobile sales were 11 million units, how many would you expect to be sold under each pair of price and income demand elasticity estimates?#

 

Paper#28606 | Written in 18-Jul-2015

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