US High School Economics class: Luxury car sales plunge as buyers put off by South Korea’s neon green licence plates
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
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Specification:
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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