"In the Past Five Years the Average Price of Our

question 52

Essay

"In the past five years the average price of our Chevrolets has risen about 6 percent a year,and each year we have sold 10 percent more cars than the previous year." How can this car dealer sell more cars as the price of the cars increases?

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Definitions:

World Price

The international market price of a good or service, determined by global supply and demand, that influences local market prices and trade policies.

Export

The process of selling goods or services produced in one country to other countries.

Absolute Advantage

A situation where a country or individual can produce more of a good or service with the same amount of resources than others.

Competitive

A market situation where multiple firms or entities vie for the same customers or market share.