It turns out that the demand for new cars would be much more affected; that is, the demand for new cars is more elastic than the demand for toothpaste. Why might this be?
One reason might be that a 5% change in the price of toothpaste
might not even be noticed, since many people may not even recall what
they last paid for toothpaste. However, a 5% increase in the price
of a car can be a significant amount of money; enough in some
cases to make the car unaffordable, and most people remember what
they paid for every car they ever purchased.
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