oil prices at the current levels will not depend the demand for cars in Malaysia but if they continues to rise, demand for bigger engine cars would be affected
petrol remains affordable because it is subsidizes by the government. while high petrol prices may deter some people from buying a car with a higher cc engine, the impact would be minimal because those vehicles by the higher income group, have lower price elasticity of demand, analyst said.
the current petrol price is $2.05 per liter. the government is expected to unveil a new subsidy scheme by reducing subsidy, and align domestic prices closer to world prices
if price of petrol continues to rise, some consumers might become more prudent in their petrol consumption and would opt for smaller engine car and fuel-efficient cars, thus affecting sales of big engine cars, an analyst said.
consumers might complain about rising petrol prices (if happens) but without a reliable public transporation system owning a car is important.however petrol prices would not impact the sale of commercial vehicles, as they would be needed to conduct business, an analyst said adding that public transportation fars would eventually be increased as well.
Question
a..Petrol remains affordable because it is subsidized by the government. using an appropriate diagram, illustrate and explainthe effect of subsidy on the domestic petrol price.
B..As a result of a reduction in subsidy, the supply of petrol will fall. what are three other factors which could cause a decrease in the supply of petrol?
C....Regardless of high petrol price, the demand for cars in Malaysia is still very high. explain three factor that would cause this situation
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