How many automobiles do you expect u s automakers to sell

Reference no: EM13392757

A researcher estimated that the price elasticity of demand for automobiles in the United States is - 1.2, while the income elasticity of demand is 3.0. Next year, U. S. automakers intend to increase the average price of automobiles by 5 percent, and they expect consumers' disposable income to rise by 3 percent. ( a) If sales of domestically produced automobiles are 8 million this year, how many automobiles do you expect U. S. automakers to sell next year? ( b) By how much should domestic auto-makers increase the price of automobiles if they wish to increase sales by 5 percent next year?

Reference no: EM13392757

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