The manager of a fleet of cars currently rents them out at the market price of $49 per day, with renters paying for their own gasoline and oil. In a front-page newspaper article, the manager learns that economists expect gasoline prices to rise dramatically over the next year, due to increased tensions in the Middle East. What should she expect to happen to the price of the cars her company rents?

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Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.