2a. The increase of public transportation fares will lead to an increase in the entire demand curve for cars (D1 to D2 in the graph). The fares become more expensive therefore decreasing people’s desire to use public transportation because it is unaffordable. This demand decrease in the public transportation industry will lead to an increase demand for cars because cars are the only substitute goods for public transportation. Therefore increasing the quantity of cars produced (Qe1 to Qe2 on the graph) which will in turn result in higher price (Pe1 to Pe2 on the graph).

2b. If the price of gas was to increase there would be a decrease in the entire demand curve (D1 to D2 on the graph) for cars. The expensive price of gas woul

4b. Critics of floor prices believe that this degree of government intervention can lead to mismanagement and inefficiency. A specific issue with floor prices is that they are sometimes higher than the equilibrium price causing the government to pay the difference of the floor and equilibrium price to the workers. Minimum wage is another example of floor prices. This floor price restricts employers from paying workers so little that they cannot support themselves. Critics believe that minimum wage causes people to lose jobs, especially the young and unskilled, because minimum wage is often set above the equilibrium wage. Therefore, this forces companies to pay higher wages. This only makes companies want to higher less people.

2c. Steel is a necessity in manufacturing cars. If the price of steel were to increase then this would lead decrease in the entire supply curve (S1 to S2 on the graph). Since the price of steel is more expensive then the car company would manufacture less quantity of cars (Qe1 to Qe2 on the graph), however, because steel is expensive the car manufacturing company would increase the price of cars in order to be able to afford the steel (Pe1 to Pe2 on the graph).

4a. A floor price is a government-decided price below which a good cannot

Some topics in this essay:
Pe1 Pe2, D1 D2, Qe1 Qe2, Supply Assignment, S1 S2, floor prices, pe1 pe2, qe2 graph, qe1 qe2, qe1 qe2 graph, pe1 pe2 graph, pe2 graph, demand curve, d2 graph, d1 d2, entire demand, public transportation, entire demand curve, d1 d2 graph, curve s1 s2,