If the demand for used cars decreases after the price of a new car falls,used cars and new cars are
A) inferior goods.
B) substitute goods.
C) complementary goods.
D) normal goods.
E) The questions errs because it is the quantity of used cars, NOT the demand for used cars, that will change when the price of a new car falls.

Question

Quizplus · Accepted Answer

When the price of a new car falls, more people are likely to choose to purchase new cars instead of used cars. This means that used cars and new cars are substitutes for each other, and a decrease in the price of new cars leads to a decrease in the demand for used cars.

If the Demand for Used Cars Decreases After the Price