A big supplier of used cars is rental car companies, who sell their rental cars after...

 

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A big supplier of used cars is rental car companies, who sell their rental cars after they're too used to rent out but are still good. Rental cars are not a substitute or complement for used cars on the demand side. Due to huge increases in demand for rentals, rental car companies decide to hold on to their stock a little while longer, and continue renting out cars that are a little more run down rather than selling them as used. What effect will this price increase have on the demand curve for used cars? A big supplier of used cars is rental car companies, who sell their rental cars after they're too used to rent out but are still good. Rental cars are not a substitute or complement for used cars on the demand side. Due to huge increases in demand for rentals, rental car companies decide to hold on to their stock a little while longer, and continue renting out cars that are a little more run down rather than selling them as used. What effect will this price increase have on the demand curve for used cars?

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The decision of rental car companies to hold onto their stock of used cars longer and continue renti... View the full answer