The Price Elasticity of New Automobile Purchases Is About 1

Multiple Choice

The price elasticity of new automobile purchases is about 1.2.This implies that an increase of $1,000 on a $10,000 automobile will

A) reduce the number of autos sold by approximately 1.2 percent.
B) increase the consumer expenditures on autos by approximately 1.2 percent.
C) reduce the number of autos sold by approximately 12 percent.
D) increase consumer expenditures on autos by approximately 12 percent.