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  • Basic Economic Concepts

Click to read the article below and then answer the questions:

Luxury car sales plunge as buyers put off by South Korea’s neon green licence plates

  • Explain the role of signalling in the South Korean luxury car market. How does the requirement to use a green licence plate impact the opportunity for signalling?

  • What has happened to the demand for luxury cars?

  • Using your best estimate of the elasticity of demand for luxury cars, predict what will happen to the tax revenue from luxury cars in South Korea

Ariel Slonim at MRU Econinbox

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