During the last year while the pandemic was impacting our lives. the price of used cars has soared. Assume that the price of used cars is solely determined by supply and demand.Use supply and demand concepts to explain whether each of the following supports an increase in the price of used cars. Explain why each of these would or would not increase the price of used cars.Requesting assistance for questions 4 & 5 only. Due to supply chain issues, the supply of new cars decreased significantlyBecause of issues related to the pandemic, more people were unwilling to rely on public bus/trains/subways for commuting to workDue to the pandemic, people had extra money since they were not spending money on vacations, going out to eat, etc.Interest rates remained at historically low levelsThe amount of used cars from repossessions, from rental car companies and from cars coming off leases declined significantly

4. Interest rates remained at historically low levels 5. The amount of used cars from repossessions,…

Answered: During the last year while the pandemic…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 8TY

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During the last year while the pandemic was impacting our lives. the price of used cars has soared.

Assume that the price of used cars is solely determined by supply and demand.

Use supply and demand concepts to explain whether each of the following supports an increase in the price of used cars. Explain why each of these would or would not increase the price of used cars.

Requesting assistance for questions 4 & 5 only.

Due to supply chain issues, the supply of new cars decreased significantly
Because of issues related to the pandemic, more people were unwilling to rely on public bus/trains/subways for commuting to work
Due to the pandemic, people had extra money since they were not spending money on vacations, going out to eat, etc.
Interest rates remained at historically low levels
The amount of used cars from repossessions, from rental car companies and from cars coming off leases declined significantly

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