Question 2

Consider the impact of the following economic events on themarket for Holden cars:

There is an increase in indirect taxes on Holden and at the same time Ford becomes less popular.

Describe the process of moving from the initial equilibrium to the final equilibrium. Clearly identify one relevant condition of demand and one of supply, the direction in which the demand and supply curves shift and state the impact on the equilibrium price and quantity of Holden.