What will happen to the equilibrium price and quantity of new cars if the price of gasoline falls, the price of steel falls, public transportation becomes more expensive and less comfortable, and the wages of auto workers decrease?

Question

Quizplus · Accepted Answer

The demand for cars will increase due to cheaper gasoline and less attractive public transportation, while the supply will increase due to cheaper steel and lower wages. This leads to a rise in quantity, but the effect on price is ambiguous as both demand and supply increase.

What Will Happen to the Equilibrium Price and Quantity of New