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10 % Fullscreen Assigned as EOC 4.05 Suppose that a rise in Buy American sentiment in the U.S. reduces the quantity demanded at each price by 500,000 (.5 million) cars per year. What is the new equilibrium price? Quantities Quantities Prices Demanded Supplied (thousands) (millions per year) (millions per year) $8 $10 $12 $14 $16 $18 $20 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.25 1.50 1.75 2.00 2.25 2.50 2.75 UE: a day Numeric Answer: UE: 5 days Hide Open in fullscreen
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Answer #1

new equlibrium price will be $12 because at this point quantity demanded=quantity supplied=1.75, because quantity demanded has reduced by 0.5 million from 2.25 to 1.75.

the above is the answer

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