First, “With production of many new-vehicle lines being slowed or halted by the current microchip shortage, a lack of supply has sent more U.S. consumers (even rental companies) to the used-car market.” Is this a demand or supply issue for used cars? (please answer) Will this increase or decrease it? (please answer) Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it. Did price increase of decrease? (please answer) Did quantity increase or decrease? (please answer)   Second, “In turn, the upsurge in demand along with a short supply of product to sell (fewer new models sold means fewer trade-ins winding up on used-vehicle lots) Is this a demand or supply issue? (please answer) Will this increase or decrease it? (please answer) Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it. Did price increase of decrease? (please answer) Did quantity increase or decrease? (please answer) When you look at both sets of graphs you drew, what happened to price in each case?   What happened to quantity in each case? Overall, which can we say (price or quantity) will increase with certainty? Overall, which (price or quantity) can we say may or may not increase/ decrease? Why?

1. Read this article, paying particular attention to the first 3 paragraphs. The following excerpt describes some of the changes that have occurred in the used car market. The market is the Used Car Market.

“With production of many new-vehicle lines being slowed or halted by the current microchip shortage, a lack of supply has sent more U.S. consumers (even rental companies) to the used-car market. In turn, the upsurge in demand along with a short supply of product to sell (fewer new models sold means fewer trade-ins winding up on used-vehicle lots) has caused prices to skyrocket literally across the board.”

First, “With production of many new-vehicle lines being slowed or halted by the current microchip shortage, a lack of supply has sent more U.S. consumers (even rental companies) to the used-car market.”

Is this a demand or supply issue for used cars? (please answer)

Will this increase or decrease it? (please answer)

Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it.

Did price increase of decrease? (please answer)

Did quantity increase or decrease? (please answer)

Second, “In turn, the upsurge in demand along with a short supply of product to sell (fewer new models sold means fewer trade-ins winding up on used-vehicle lots)

Is this a demand or supply issue? (please answer)

Will this increase or decrease it? (please answer)

Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it.

Did price increase of decrease? (please answer)

Did quantity increase or decrease? (please answer)

When you look at both sets of graphs you drew, what happened to price in each case?

What happened to quantity in each case?

Overall, which can we say (price or quantity) will increase with certainty?

Overall, which (price or quantity) can we say may or may not increase/ decrease? Why?