Question

All consumers have received a tax cut. What happens to the equilibrium price of automobiles?

a. increases
c. remains the same
b. decreases
d. none of the above

Answer 1

All consumers have received a tax cut. What happens to the equilibrium price of automobiles?

The equilibrium price of automobiles A. increases. The equilibrium price of automobiles increases because consumers now have more disposable income than they had before receiving the tax cut. A tax cut is a reduction of taxes that are placed on those that live in the society they are over. A tax cut can bring a lot of growth to an economy as those who live within have more money to spend.

Answer 2

The answer would be : a. Increases

If the consumers received a Tax Cut, they will have more Disposable Income that they can used to buy Products.

Automobiles' companies will see this as an opportunity to increase the price of their product to generate more revenue for the company