Draw a demand curve for cars. What happens to it in each of the following scenarios? Why? Car dealerships slash prices by 10% Prices of public transportation goes down A recession leads to falling household incomes b) Other things remaining the same, what would happen to the supply of a particular commodity if the following changes occur? 1. The price of the commodity decreases. 2. The prices of inputs used to produce the commodity increase. 3. The price of a commodity that is a substitute in production decreases.
Draw a demand curve for cars. What happens to it in each of the following scenarios? Why? Car dealerships slash prices by 10% Prices of public transportation goes down A recession leads to falling household incomes b) Other things remaining the same, what would happen to the supply of a particular commodity if the following changes occur? 1. The price of the commodity decreases. 2. The prices of inputs used to produce the commodity increase. 3. The price of a commodity that is a substitute in production decreases.
Chapter4: Demand, Supply, And Markets
Section: Chapter Questions
Problem 4.8P
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a) Draw a demand curve for cars. What happens to it in each of the following scenarios? Why?
Car dealerships slash prices by 10%
Prices of public transportation goes down
A recession leads to falling household incomes
b) Other things remaining the same, what would happen to the supply of a particular commodity if the following changes occur?
1. The price of the commodity decreases.
2. The prices of inputs used to produce the commodity increase.
3. The price of a commodity that is a substitute in production decreases.
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