Attempts3. Determinants of demandThe following graph shows the demand curve for sedans in New York City. For simplicity, assume that all sedans are identical and sell for the sameprice. Initially, the graph shows market demand under the following circumstances: Average household income is $50,000 per year, the price of agallon of regular unleaded gas is $4 per gallon, and the price of a subway ride is $3.00.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.PRICE (Thousands of dollars per sedan)40curve.302010Average / 800Demand for Sedans.Demand100 200 300 400 500 600 700 800 900QUANTITY (Sedans per month)Graph Input ToolDemand for SedansA decrease in average income causes a leftwardPrice of a sedan(Thousand ofdollars)QuantityDemanded(Sedans per month)Demand ShiftersAverage Income(Thousands ofdollars)Price of Gas(Dollars per gallon)Price of a SubwayRide(Dollars)20450504Consider the graph. Suppose that the price of a sedan increased from $15,000 to $20,000. This would cause a3?the demand curve; therefore, you may conclude that sedans aregood. (Hint: Try substituting different values for Average Income in the graph input tool and observing what happens.)Suppose that the price of a subway ride falls from $3.00 to $2.50. Because driving a car and taking the subway aredecrease in the price of a subway ride shifts the demand curve for sedans to thethe demand 3. Determinants of demandThe following graph shows the demand curve for sedans in New York City. For simplicity, assume that all sedans are identical and sell for the sameprice. Initially, the graph shows market demand under the following circumstances: Average household income is $50,000 per year, the price of agallon of regular unleaded gas is $4 per gallon, and the price of a subway ride is $3.00.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.PRICE (Thousands of dollars per sedan)40curve.30201000Demand for SedansDemand100 200 300 400 500 600 700 800 900QUANTITY (Sedans per month)Graph Input ToolDemand for SedansA decrease in average income causes a leftwardPrice of a sedan(Thousand ofdollars)QuantityDemanded(Sedans per month)Demand ShiftersAverage Income(Thousands ofdollars)Price of Gas(Dollars per gallon)Price of a SubwayRide(Dollars)20450504Consider the graph. Suppose that the price of a sedan increased from $15,000 to $20,000. This would cause a3shift ofSuppose that the price of a subway ride falls from $3.00 to $2.50. Because driving a car and taking the subway aredecrease in the price of a subway ride shifts the demand curve for sedans to the?the demand curve; therefore, you may movement along ans aregood. (Hint: Try substituting different values for Average Income in the graph input tool and observing what happens.)the demand

The law of demand is a fundamental principle in economics that describes the relationship between…

3. Determinants of demand The following graph shows the demand curve for sedans in New York City. For simplicity, assume that all sedans are identical and sell for the same price. Initially, the graph shows market demand under the following circumstances: Average household income is $50,000 per year, the price of a gallon of regular unleaded gas is $4 per gallon, and the price of a subway ride is $3.00. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 40 8 PRICE (Thousands of dollars per sedan) curv 20 O Demand for Sedans Demand 0 100 200 300 400 500 600 700 800 900 QUANTITY (Sedans per month) Graph Input Tool Demand for Sedans Price of a sedan (Thousand of dollars) A decrease in average income causes a leftward Quantity Demanded (Sedans per month) Demand Shifters Average Income (Thousands of dollars) Price of Gas (Dollars per gallon) Price of a Subway Ride (Dollars) 20 450 Consider the graph. Suppose that the price of a sedan increased from $15,000 to $20,000. This would cause a 50 shift of the demand curve; therefore, you may movement along ans are good. (Hint: Try substituting different values for Average Income in the graph input tool and observing what happens.) Suppose that the price of a subway ride falls from $3.00 to $2.50. Because driving a car and taking the subway are decrease in the price of a subway ride shifts the demand curve for sedans to the ▼ the demand

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC