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Do you think the price elasticity of demand for Ford sport-utility vehicles (SUVs) will increase, decrease or remain the
same when each of the following events occurs? (State your answer andreason behind your answer for each event).
A) Other car manufactures, such as General Motors, decide to make and sell SUVs

B) SUVS produced in foreign countries are banned from the American market.

C) Due to ad campaigns Americans believe that SUVs are much safer than an ordinary passenger cars.

D) The time period over which you measured the elasticity lengthens. During that longer longer time, new models such as four-wheel-drive cargo appear.

Respuesta :

a. When other car manufacturers begin to make SUVs, the price elasticity of demand for Ford's SUV will increase. This is because the options consumers have has also increased.

b. When import is banned, the price elasticity of demand for Ford's SUVs will decrease. This is because there are less substitutes for  Ford's SUVs. Consumers would now have limited choices.

c. As a result of the ad campaigns,  the price elasticity of demand for Ford's SUVs will decrease. This is because other cars would be considered to be les safe when compared with the Ford SUVs.

d. Overtime, the price elasticity for Ford Cars will increase as there would be more substitutes

Price elasticity of demand measures how quantity demanded responds to changes in the price of a good

Types of price elasticity

  1. Elastic demand : this means that quantity demanded is sensitive to changes in price. Coefficient of elasticity is greater than 1
  2. Inelastic demand : this means that quantity demanded does not respond much to change in price.  Coefficient of elasticity is less than 1

To learn more about demand elasticity, please check: https://brainly.com/question/13565779?referrer=searchResults