Ask Question
BusinessBusiness
28 June, 08:11

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?

a. Small automobiles become more fashionable:

b. The price of large automobiles rises (with the price of small autos remaining the same):

c. Income declines and small autos are an inferior good:

d. Consumers anticipate that the price of small autos will greatly come down in the near future:

e. The price of gasoline substantially drops:

+5
Answers (2)
  1. 28 June, 08:29
    0
    (a) This will lead to an increase the demand for small automobiles such as mini-cooper and fiat 500.

    (b) An increase in the price of its related good, will lead to an increase the demand for small automobile.

    (c) There is an inverse relationship between the income of an individual and the demand for an inferior good. So, if the income of an individual declines as a result the demand for small autos increases.

    (d) This will reduces the demand for small automobiles as future prices of small autos are expected to be fall.

    (e) This is ambiguous. We know that autos and gasoline are complimentary goods, so if there is a decrease in the price of gasoline then this will result in rising demand for all the cars.
  2. 28 June, 08:35
    0
    a. Demand will increase.

    b. Demand will increase.

    c. Demand will increase.

    d. Demand will decline.

    e. Demand will increase.

    Explanation:

    a. If small automobiles become more fashionable, people will prefer them more. This will lead to an increase in demand for autos.

    b. If there is an increase in the price of large automobiles and the price of the small automobiles remain the same, people will prefer the cheaper substitutes. This will cause the demand for small automobiles to increase.

    c. Inferior goods have a negative income effect. SO, when income declines the demand for small autos will increase and vice versa.

    d. If consumers expect the price of small autos to fall in the near future, they will hold their money to buy autos when their price fall. This will cause the current demand to fall.

    e. When the price of gasoline drops it will become cheaper to use autos. This will lead to an increase in demand for autos.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? a. Small automobiles ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Bonds are considered to offer a guaranteed return, as they must be honored by law, but which is still a potential risk that investors face?
Answers (2)
When evaluating multiple alternatives or projects, against what must they be compared, if they are (a) independent, and (b) mutually exclusive
Answers (1)
A person who desires high income from an investment would be most concerned with?
Answers (1)
On January 1, Pacer Corporation issued $2000000, 13%, 5-year bonds with interest payable on January 1. The bonds sold for $2197080. The market rate of interest for these bonds was 11%.
Answers (1)
If a company is concerned about lending money to a risky customer, which one of the following would it not want to do? Require the customer to pay cash in advance. Provide the customer a lengthy payment period to increase the chance of paying.
Answers (1)
New Questions in Business
Gontier corporation stock currently sells for $64.18 per share. the market requires a return of 12 percent on the firm's stock. required: if the company maintains a constant 5.
Answers (1)
If someone asked you, "Why should I bother worrying about my credit score?" what would you say?
Answers (1)
Hall and Donnell reported findings of five separate studies involving over 12,000 managers that explored the relationship between managerial achievement and attitudes toward subordinates.
Answers (1)
On September 1, 2021, Daylight Donuts signed a $188,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022.
Answers (1)
When the Central Bank acts in a way that causes the money supply to increase while aggregate demand remains unchanged, it is A) following an expansionary monetary policy. B) following a contractionary monetary policy.
Answers (1)
Home » Business » What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? a. Small automobiles become more fashionable: b.
Sign Up Forgot Password?