00:01
So we're going to draw a market to analyze this question, right? as soon as you see demand or supply, you shouldn't try to answer these questions with words.
00:07
You should try to answer them with a diagram, right? a market is a story about the quantity and price where demand is sloping down following the law of demand, right? higher prices reduce demand, but higher prices incentivize supply.
00:22
And now we're going to hit the market with a shock, which is going to be an increase in demand.
00:28
So this could come about for a number of reasons, not specified here.
00:33
It could be like the price of gas is getting cheaper so that people want to own more car.
00:38
It could be that the government is playing with taxes or rebates in some way to incentivize car ownership.
00:45
It could be that housing prices are driving people to the suburbs required to have to own more cars, etc, etc.
00:52
But it's going to increase...