Show the following cases using diagram and explain in brief.
a. Change in demand for cars when there is an increase in price of petrol
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Explanation:
since petrol and car are complimentary goods they are both used together. Now the demand curve for the car was at D'D' when the price of petrol was not changed
But, when the price of petrol increased the demand curve shifted from D'D' to DD and dand for the car reduced to Q' from Q
This is because the consumer started to purchase less cars because of the high prices of petrol.
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