題組內容

2. A recent study determined the following elasticities for Volkswagen Beetles(福斯金龜車)： Price elasticity of demand = 2 Income elasticity of demand - 1.5 The supply of Beetles is elastic. Based on this information, are the following statements true of false? Explain your reasoning,

b. An increase in consumer income will increase the price and quantity sold of Beetles. Since price elasticity of demand is greater than 1，total revenue will go down. (6%)