Would you cut the price to increase your revenue?

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You are the manager of a successful automotive dealership. You have estimated the income elasticity for your automobiles to be 0.9, while the price elasticity of demand for your automobiles is -1.25.

Would you cut the price to increase your revenue? Discuss.
You read in the newspaper that the Federal Reserve is estimating the economy will expand by 10% in the next quarter. What would be expected to happen to the total quantity of cars sold?

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