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This diagram represents the demand for new cars in Ireland in 2015 - Leaving Cert Economics - Question 7 - 2017
Question 7
This diagram represents the demand for new cars in Ireland in 2015. (i) The demand for new cars increased in 2016. Draw the new demand curve for cars and label it D... show full transcript
Worked Solution & Example Answer:This diagram represents the demand for new cars in Ireland in 2015 - Leaving Cert Economics - Question 7 - 2017
Step 1
Draw the new demand curve for cars and label it D1.
Answer
To draw the new demand curve, you begin with the original demand curve labeled D. Since the demand for new cars increased in 2016, you will need to shift the demand curve to the right. This indicates an increase in demand at every price level. After drawing the new demand curve, ensure you label it as D1.
Step 2
Suggest two reasons for the increase in the demand for new cars in Ireland in 2016.
Answer
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Some companies are offering loans at low or zero interest rates, which makes financing new cars more accessible for buyers.
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Increased employment and higher incomes for many employees have led to greater economic confidence, resulting in more consumers choosing to purchase new cars.