Comment on degree of substitutability between european and

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Reference no: EM13394299

Assuming the following demand for European luxury automobiles:

Where P = price of European luxury cars

PA = price of American luxury cars

PJ = price of Japanese luxury cars

Y = annual income of car buyers

a. Comment on the degree of substitutability between European and American and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation.

b. Comment on the coefficient for income.

c. Comment on the coefficient for the European car price.

Reference no: EM13394299

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