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The demand for autos is likely to be

The demand for autos is likely to be

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Answer #1

Demand for a particular product is elastic inelastic or unitary elastic. Elasticity depends on many factors including the availability of substitutes, relative share in the budget, whether it is a luxury or necessity, etc. Here automobiles represent a broadly definded goods and therefore we expect its demand to less elastic or more inelastic. This can be compared to any specific model of an automobile which is relative elastic as it is narrowly defined

Hence demand for autos is less elastic.

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