Economics (AS & A Level) · May / June 2025 · Paper 12 · Question 6

D1 and S1 are the initial demand and supply curves in the market for new cars with an equilibrium at X. What will cause the demand curve to shift to D2 and the supply curve to shift to S2?

1. Aa decrease in real incomes and a rise in the costs of new car production
2. Ba decrease in the price of petrol and a subsidy on new car production
3. Can increase in the availability of loans for new car purchases and a specific tax on new cars
4. Dan increase in the price of train travel and an increase in the number of car producers

As printed in the paper