What effect would a reduction in the U.S. selling price of Japanese-made cars have on the U.S. demand for American-made cars?
A) No effect, because price changes affect quantity demanded, not demand.
B) The demand would decrease.
C) The demand would increase.
D) We cannot tell unless we know the elasticities of demand for Japanese-made and American-made cars.
E) We cannot tell unless we know what happened to the price of American-made cars.
B
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The relative price of a good is greater than the money price of a good
Indicate whether the statement is true or false
Only when the goods market is in equilibrium is it true that ________
A) actual expenditure equals output B) the amount of goods and services produced equals actual expenditure C) planned expenditure equals the amount of goods and services produced D) demand for foreign goods equals foreigners' demand for domestic goods E) none of the above