Answer:
c.About half of the long-run reduction in quantity demanded arises because people drive less and about half arises because they switch to more fuel-efficient cars.
Explanation:
In a long run, The demand is more elastic than in a short run, this is because the consumers have both more time and number of substitutes to switch to. So almost 50% of long-run decrease in quantity demanded is due to less driving by people, while rest 50% is due to people switching to more fuel-efficient cars.
Answer:
consumer income rises; pizza dough decreases in price
⇒ output increases; price uncertain
- higher consumer income results in higher prices
- but decrease in the price of inputs results in lower prices
- both result in higher output
consumer income falls; pizza dough decreases in price
⇒ price decreases; output uncertain
- both result in lower prices
- falling consumer income result in lower output
- decrease in the price of inputs results in higher output
consumer income falls; cheese increases in price
⇒ output decreases; price uncertain
- both lower output
- falling consumer income decreases price
- increase in price of inputs increases price
consumer income rises; cheese increases in price
⇒ price increases; output uncertain
- both increase price
- rising consumer income increase output
- increase in price of inputs decreases output
