Purchase of New Car Essay

732 Words Nov 26th, 2012 3 Pages
The Purchase of a New Car

In purchasing a new car there are going to be plenty of factors that could possibly cause change in supply and demand. When national income falls, the demand for automobiles falls. When it is rising, so is the demand for autos. When the price of fuel rises, the demand for automobiles also falls a bit. In addition, factors such as the price of another automobile will shift the demand for a car, improvements in technology will increase the supply of automobiles, increase in the price of tires, steel, rubber, engines or any other component of the car will cause a decrease in demand for automobiles. There are many different things that can affect the supply and demand for cars. When the price of
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It is considered to be a big necessity. Tires or wheels would also complement the car. You need these in order for the car to move as well. Gas could possible be considered a substitute also depending on the type of car that is purchased. The price of gasoline is increasing but the demand for hybrids and an electric vehicle is also increasing. If the price of one good, gasoline in this case, increases and the demand for a related good increases (vehicles) then the goods are to be considered substitutes. In the case of tires you are going to have plenty of options except for not having them at all. You can purchase used tires and different brands to better suit your needs for the car. In buying or purchasing a new car you have to wonder about price elasticity. You may need to find an alternative product to oil or the gasoline that will need to be used. This is of course based off of how much gasoline is being sold for and how much money you can afford to spend as a consumer. You may feel the need to start using public transport or a bicycle instead of cars, telecommuting or teleconferencing instead of traveling so much. In the longer term, it could involve buying an electric or a hybrid car, as discussed earlier. The concept of price elasticity tends to help companies maximize their profit and decide whether a particular market can be profitable or not. You as the consumer or the economist need to

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