Wednesday, January 16, 2013


http://business.time.com/2013/01/16/virginia-is-worried-cars-are-becoming-too-fuel-efficient/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+time%2Fbusiness+%28TIME%3A+Top+Business+Stories%29&utm_content=Netvibes

This article is a classic example of supply and demand in todays economy. It displays the cause and effects of a shift in demand for fuel. Since the demand for fuel shifted left, or downward, both price and quantity of the product sold will decrease. With no shift in supply, the government had to apply a sales tax on the oil to shift the curve back to equilibrium. This is a clear representation of our earlier chapters, and is a good example of a real world application of the shifting of supply and demand graphs.

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