Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars?
A) a fall in income if used cars are an inferior good
B) an increase in the wage rate paid to used car salespeople
C) neither of the above because the question suggests a violation of the "law of demand"
D) neither of the above because the question suggests a violation of the "law of supply"
A
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Included in government expenditures are government purchases and transfer payments
Indicate whether the statement is true or false
Assume that you own a small boutique hotel. In an attempt to raise revenue, you reduce your rates by 20 percent. However, your revenue falls. What does this indicate about the demand for your boutique hotel rooms?
A) Demand is inelastic. B) Boutique hotel rooms are inferior goods. C) The demand curve for your hotel rooms is vertical. D) Demand is elastic.