Suppose an increase in the price of rubber coincides with an advance in the technology of tire production.As a result of these two events,the demand for tires

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Quizplus · Accepted Answer

The increase in the price of rubber will lead to a decrease in the supply of tires, as it will increase the cost of production for tire manufacturers. However, the advance in technology of tire production will lead to an increase in the supply of tires, as it will make tire production more efficient and cost-effective. Therefore, it is not possible to determine the effect on the demand for tires, as it will depend on the magnitude of the changes in price and technology, as well as other factors that can influence consumer behavior. Hence, none of the above options is necessarily correct.

Suppose an Increase in the Price of Rubber Coincides with an Advance