9. According to the New York Times (11/18/06) the number of car producers in China is increasing rapidly. The newspaper reports that "China has more car brands now than the United States." But while car sales have climbed 38% in the first three quarters of the year, automakers have increased their output even faster, causing fierce competition and a slow erosion of prices." At the same time, Chinese consumer incomes have risen. Assume that cars are a normal good. Use a diagram of the supply and demand curves from cars in China to show what is happening. Explain verbally, too. Label and describe shifts and directions of Q and P carefully.

9. According to the New York Times (11/18/06) the number of car producers in China is increasing rapidly. The newspaper reports that "China has more car brands now than the United States." But while car sales have climbed 38% in the first three quarters of the year, automakers have increased their output even faster, causing fierce competition and a slow erosion of prices." At the same time, Chinese consumer incomes have risen. Assume that cars are a normal good. Use a diagram of the supply and demand curves from cars in China to show what is happening. Explain verbally, too. Label and describe shifts and directions of Q and P carefully.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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