Gas Junkie - Gasoline Prices Questions

Question: New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline...?

( Back )

Answer #1:

A
because the supply decreases
so prices rise and less Quantity supplied

Answer #2:

Increase in price of gasoline, cheaper public transportation, lower wages leads to lower demand. cheaper steel prices will lead to lower cost of production. so the effect will be B prices will fall





** Powered by Yahoo Answers