Answer to Question #214865 in Microeconomics for Tam

Question

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?

Answer 1

a) When small automobiles become better in fashion while other factors remaining constant, it's demand will increase among potential buyers

b) When the price increases for large automobiles, the demand will increase for a small automobile. As the price increases for large automobiles then there will be more demand for the quantity of small automobile

c) Demand increase when there is a fall in income of consumers, and small autos are categorized as inferior goods