Answer:
Price elasticity will increase
Explanation:
Price elasticity is defined as a measure of how sensitive quantity demanded of a product is the changes in price.
As a general rule when price increases the demand Falls and when price reduces demand rises.
Mathematically,
Price elasticity = (change in quantity demanded) ÷ (change in price)
In the given scenario other car manufacturers such as General Motors, decide to make and sell SUVs.
This will create a substitute in the market.
Ford motors will be forced to reduce price in order to maintain or increase their clientele base.
As price reduces the price elasticity will increase.
