Supply and Demand
University of PhoenixXECO/21206/24/12
The good I have experience in purchasing is buying a new car. For this assignment, I will describe the factors that may produce potential changes in supply and demand with buying a brand new car. I will decide what the two possible substitutes are for the purchase of a new car. I will establish at least two complements there may be for the car. I will also describe how the necessity of buying a new car impacts price elasticity. There are many factors might affect supply and demand when a new car is bought. The greater demand for fuel efficient vehicles is raising prices for compact vehicles. In addition, evidence shows that customers are exchanging their larger cars for smaller more fuel efficient vehicles. Another reason that might affect supply and demand is the cars’ maintenance. Certain vehicles such as BMW or Mercedes Benz have parts that are exclusive through the dealership. Though, having a car serviced at a car dealership may cost two or times more than the real cost. Going to the dealership is all right as long as the vehicle is under warranty. I think purchasing car parts at Auto Zone and Advance Auto Parts saves a great deal money. (Kowal, 2009) My family and I spent quite a bit of time talking about the dilemma of auto suppliers, manufacturers, and the possible effect of US Treasury acts directed towards this struggling industry. Besides the use of supply chain finance as a method to free up the credit markets that are crushing the supply chain to a treacherous stop, maybe an urging market is exactly what the government and private sector ought to pursue. Most of the recent difficulties are because of the credit crisis and in verity that the auto industry’s whole supply chain is made to support somewhere in the area of 14 million units, and recent estimates are less than 10 million; several as little as 9 million. This is a decline of 30%, but because of the high-level cost of auto...
Please join StudyMode to read the full document