CEO Elon Musk recently stated that Tesla Inc. is "recession-resilient" and his company's automobile production will increase even if there is an economic downturn in the future. Although Tesla was near bankruptcy in 2008 when the economy was in a recession, stronger-than expected results during the Covid-19 pandemic and consistent quarterly profits have given the company financial resources that may allow to continue production even during a recession. Read the attached article from the Wall Street Journal. Take a look at the discussion of income elasticity of demand in section 5-1G in your textbook. Pay particular attention to the formula for computing income elasticity of demand. If the income elasticity of demand for Tesla automobiles is equal to -2.0. If consumer incomes decrease by 5 percent, how much will the quantity demanded for Tesla automobiles change as a result of the change in incomes

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Impact of Income Decrease on Tesla Demand Given Income elasticity of demand for Tesla automobiles Ed ... View the full answer