Consider the market for minivans. For each of the events listed, identify which of the determinants of demand are affected. Also indicate whether demand is increased or decreased.People decide to have more children.The price of station wagons rises.

Answered: Consider the market for minivans. For…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 5P

See similar textbooks

Related questions

Question

Consider the market for minivans. For each of the events listed, identify which of the determinants of demand are affected. Also indicate whether demand is increased or decreased.

People decide to have more children.
The price of station wagons rises.

Expert Solution

Step 1

(a)

If people decide to have more children, then the demand for minivans will increase because an increase in the number of children means an increase in the number of population or consumers or buyers. Also, is the parents decide more children they will choose a minivan for their personal travels.

Step 2

In the fig. D is the demand curve and S is the supply curve. The rise in population (consumer) will shift the demand curve from D to D1. Consequently, this will increase the price from P to P1 and quantity from Q to Q1. Moreover, the equilibrium will also shift rightwards, and a new equilibrium will occur at point e1.

Step by step

Solved in 3 steps with 1 images

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Recommended textbooks for you

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc