Question

Carmax is a national chain that sells used cars. the likely impact of its arrival in the market would be to _____. everything else held constant, this would likely _____ the price of used cars.

Answer 1

1. shift the supply of used cars to the right

2. lower

Step-by-step explanation:

1. With carmax's arrival in the market this has caused the number of sellers to increase thereby shifting the supply curve to the right. An increase in the number of sellers increases the quantity supplied at each price.

2. Since the supply of used cars have increased and demand remains the same, there will be a surplus in the market for used cars resulting in lowered prices of used cars.