Suppose that in 2006, 12 million cars were purchased at $15,000 each, while in 2007, 10 million cars were purchased at $12,000 each. What might have caused this change?

Question

Quizplus · Accepted Answer

The decrease in the number of cars purchased and the decrease in price suggest that the demand for cars decreased, potentially due to a decrease in consumer income or an increase in the availability of substitutes such as airplane travel. Therefore, D, that the price of airplane tickets (a substitute for cars) fell, is the best choice.

Suppose That in 2006, 12 Million Cars Were Purchased at $15,000