Question #81364
In the market for public transport, which of the following variables would decrease demand, ceteris paribus?
A. An increase in the price of private motor vehicles.
B. A decrease in the price of private motor vehicles.
C. An increase in price of private motor vehicle service plans.
D. A decrease in the price of bus tyres.
E. An increase in the price of motorbikes, a substitute.
A. An increase in the price of private motor vehicles.
B. A decrease in the price of private motor vehicles.
C. An increase in price of private motor vehicle service plans.
D. A decrease in the price of bus tyres.
E. An increase in the price of motorbikes, a substitute.
Expert's answer
B. A decrease in the price of private motor vehicles. - The correct alternative is
In case of replacement, when the price of one product changes the demand for another company, a reduction in the price of private motor vehicles will lead to a decrease in the demand for public transport.
In case of replacement, when the price of one product changes the demand for another company, a reduction in the price of private motor vehicles will lead to a decrease in the demand for public transport.
Learn more about our help with Assignments: Microeconomics
