Factors Affecting The Demand Of Cars Essay

Factors Affecting The Demand Of Cars Essay

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There are four main factors influence the demand of cars. Firstly, the price of cars will affect the demand of cars. Secondly, the citizens’ income has the effect for the demand of cars. Thirdly, the government’s macroeconomic control policies will also effect the demand. Finally, the price of gasoline will affect the demand.
The price of cars will caused movements along the demand curve. In addition, shifts of the demand curve for cars will be caused by the price of complement goods, the appearance of substitute products, citizens’ income and the government policies.
(b)
1). Horizontal axes stands for the quantity of cars
Vertical axes stand for the price of cars

2). the demand curve would slope down.
Because when the price of cars is so high, people will buy less cars. However, when the price of cars is low, people will buy more cars than before. According to the diagram,when the price of cars is 30,000, the quantity of cars are five. In addition, when the price of cars is 20,000, the quantity od cars are ten. So we can know clearly that the demand curve is sloping down.
(c).
Firstly, the price of raw materials affect the supply curve. When the price of raw material will go up or down, the production coats will rise or fall. Secondly, the price of substitute products also affect the supply curve. Because the relatived products are competitive relationship, when the price of one product goes up, another will goes down. It will affect suppy. Thirdly, production technology will affect the supply curve. When the level of technology is rising or falling , the production costs will go down or up. finally, the government policies will affect the supply curve. Positive policies will make the supply go up, conversely, it will go down....


... middle of paper ...


... the leak. Because chemicsl factory need to pay lots of money to fixing the leak. It will caused the production costs increase. So the price of chemicals will rise. The quilibrium price will increase and the quantity of chemicals will decrease.


(c).
Buyers who far away form the contamination need to pay more money buying the chemical products. Although they don’t live near to the contamination, they will still be affected by the problem. Because the factory fix the leak need to pay high fix fees. Facotey would promote the price of chemicals and make themselves sustain a profit stiuation. It caused the products’ cost of production increasing. People need to pay much than before. I think that this effect is not appropriate because the factory caused the leak problms and they shoudn’t separate the responsibility to customers. they need to check the security of factory

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