Question
Suppose the federal government will start a new tax on automakers in 2020. Also, due to geopolitical uncertainty in the Middle East, crude oil
Suppose the federal government will start a new tax on automakers in 2020. Also, due to geopolitical uncertainty in the Middle East, crude oil supply would be much lower than regular years. So gasoline prices almost doubled in a few months. For vehicle market, these changes mean that supply and demand have both changed. In particular, the effect on the demand is much larger than the effect on the supply. The result is that the price of autos will and the number of autos sold will A. rise; increase B. fall; decrease C. fall; perhaps change but we are not sure. D. rise; perhaps change but we are not sure.
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