Use the demand and supply model to demonstrate the change in the market conditions from Q3 2020 to Q3 2021 for the new car market and used car market in the US. Use two separate diagrams corresponding to the two markets, and carefully label the curves and clearly indicate all equilibrium prices and quantities.

• What do you think the price elasticity of demand (PED) might look like for new or used cars in Q3 2021 compared to Q2 2020? In your answer, discuss a key determinant of PED.