Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect a shift to the right in the demand curve for Hondas and a higher price for Hondas. a shift to the left in the supply curve of Hondas and a higher price for Hondas. a shift to the right in the supply curve for Hondas and a lower price for Hondas. a shift to the left in the demand curve for Hondas and a lower price for Hondas.

Respuesta :

Answer:

We would expect a shift to the right in the demand curve for Hondas and higher prices for Hondas

Explanation:

This occurs because Harley Davidson and Honda Motorcycles are substitute goods.

Since the price of Harley Davidsons have gone up, people will now feel Hondas are cheaper than Harleys. This will make them want to buy more Hondas. This causes an increase in the demand for the Hondas, whereas, the supply of the Hondas is still fixed.

On the demand curve, this increase in demand  is reflected by a shift to the right by the demand curve.

Because the market price of the Hondas are determined by  the intersection between the demand and supply curve, this right-ward shift in the demand curve, without a corresponding shift in the supply curve will cause the prices of Hondas to go up.

The sketch below corroborates the above explanation

Ver imagen tochinwachukwu33