When Toyota introduced its 2010 Prius, it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model. Which of the following would explain the price differential? A) The demand for the Prius had increased, and the supply of the Prius had decreased. B) The supply of the Prius had decreased, and the demand for the Prius remained unchanged. C) The demand for the Prius had decreased, and the supply of the Prius had increased D) The demand for the Prius had increased, and the supply of the Prius remained unchanged.

Question

Thelma

Business

18 February, 22:25

When Toyota introduced its 2010 Prius, it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model. Which of the following would explain the price differential? A) The demand for the Prius had increased, and the supply of the Prius had decreased. B) The supply of the Prius had decreased, and the demand for the Prius remained unchanged. C) The demand for the Prius had decreased, and the supply of the Prius had increased D) The demand for the Prius had increased, and the supply of the Prius remained unchanged.

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Answers (1)

Know the Answer?

Ayaan Simmons · Answer 1

C. The demand for the Prius had decreased, and the supply of the Prius had increased

Explanation:

Toyota reducing its average retail price for 2010 is as a result of a decrease in the demand for the Prius in year 2009 and increase in the supply. In other for Toyota to make more sales, it has to reduce the price in other for the goods to get more customer demand.

Hence the best answer is C. The demand for the Prius had decreased, and the supply of the Prius had increased