(Answered) Assume that the demand for luxury cars is price elastic

Finance

Assume that the demand for luxury cars is price elastic. Based on this assumption, explain why each of the following statements is true or false.

a) When the price of luxury cars increases, the number of luxury cars purchased increases.

b) The percentage change in the price of luxury cars is less than the percentage change in the quantity demanded.

c) If average family incomes fall, sales of luxury cars will decrease.

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