Is the decrease in prices of used cars supply driven, demand driven, or both? Explain.

b)Both the price of cars and the quantity purchased of cars are significantly lower this year compared to last year. The law of demand states that when price decreases, quantity demanded increases, other factors constant. Is what's happening in the market for cars a violation of the law of demand? Explain.

c) Do you think the market for used cars is more price elastic or inelastic compared to the market for new cars? Explain.

d.) Suppose someone is in the market for a new car, and his name is AJ and has two daughters. What car would you recommend for this hypothetical person? This hypothetical person who teaches economics is interested in purchasing an electric vehicle but is concerned that the charging infrastructure/technology isn't sufficient yet. Do you think I, I mean he, should wait to buy an electric car?

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a The decrease in prices of used cars can be both supplydriven and demanddriven Supplydriven If there is an increase in the supply of used cars due to ... View the full answer