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Well, when the gas price is increased, people want to use the car that has low usage in gas.
So the demand and supply of fuel-efficient cars in the short run will be increased.
But as the year passes, supply will started to slowly dropping
hope this helps
So the demand and supply of fuel-efficient cars in the short run will be increased.
But as the year passes, supply will started to slowly dropping
hope this helps
The effect of price increase on fuel-efficient cars would be as follows:
- Increase in demand for fuel-efficient cars in the short run and supply will increase.
- In the long run, the supply will fall.
What is the impact of price on supply?
The price of a specific product, while the other factors stay constant, carries a direct impact on the supply of that product.
As per the question, the rise in prices of gas would result in increased demand for fuel-efficient cars in the short run.
While in the long-term, the peak will be attained and then, the demand will fall eventually.
Learn more about "Demand" here:
brainly.com/question/13320101
