Discussion question 11: price elasticity

Price markups:

Visit Edmunds.com (www.edmunds.com) to obtain invoice and retail price information on new and used vehicles. Choose three different makes and models of new vehicles and research their prices.

  1. Does the difference between the invoice and suggested retail price vary from model to model? What, in your opinion, explains the differences?
  2. Are certain options subject to higher markups than other options? Again, in your opinion, what explains any differences you find?
  3. Are vehicles an elastic or inelastic good?
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