Scenario: Do you think the price elasticity of demand for toyota (clutch vehicles) will increase, decrease or remain the same when each of the following occurs? Explain a. Other motor vehicles manufacturers, such as Honda and Ford, decided to make and sell clutch vehicles. b. Clutch vehicles produced from foreign countries are banned in the Philippine Market. c. Due to ad campaigns, Filipinos believe that clutch vehicles are much safer than automatic. The price elasticity of demand for clutch vehicles will increase
Scenario: Do you think the
a. Other motor vehicles manufacturers, such as Honda and Ford, decided to make and sell clutch vehicles.
b. Clutch vehicles produced from foreign countries are banned in the Philippine Market.
c. Due to ad campaigns, Filipinos believe that clutch vehicles are much safer than automatic.
The price elasticity of demand for clutch vehicles will increase
d. The time period over which you measure the elasticity lengthens. During that longer time, new models such as Ferrari appear.
B. Solve for Price elasticity of demand. (20pts)
The price of premium rice increases from Php38.00 to Php40.50 and the amount you buy falls from 10 kilos to 8 kilos per week.
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