Introuction to New Economic Big Development (Paperback) | Released: 12 May 2020

⦁What's the effect of the used car market on car price and seond hand book price similar consumer behavioral characteristics?While justifying when one book shop sells a one-use textbook to one student reader, this book shop is similar to one car seller sells a used or second hand car to one car buyer selling behaviors. I shall explain that why second hand or used book is similar to second car or used car selling or consumer behaviors, they have similar second hand book or car purchase behavioral characteristics as below: A word about the Kearl text. I do not receive any royalties and have no economic interest in the text - when you buy the text, not a single penny goes to me. It's designed to be a "disposable," one-use text in order to keep the price down. (The used book market actually drives up the price of texts - to see why, think of what would happen to car prices if used car sales were not permitted.) How does the used car markets drive up the price of the good? With an used market, the buyer is willing to pay more, knowing that he can resell later. However, without an used market, everyone is forced to buy new cars, raising demand, and thus raising the price of new cars. How to think about these countervailing effects? Are the used books and used cars market actually analogous like the professor suggests? The professor and his publisher have a monopoly on the new textbook, but no one controls the new car market. Therefore, if people keep reselling text, the publisher will use their monopoly and raise the price of new books to compensate. In contrast, car manufacturers can't do so due to competitive pressure. Imagine that there are two kinds of people, rich and poor, and no market for used books. Rich people are willing to pay more for new textbooks. Poor people cannot afford to buy new textbooks. In the absence of a market for used books, poor people will not buy textbooks. Imagine now that there is market for used books. Poor people are now able and willing to pay second hand textbooks. And rich people now have someone to sell the books too once they are done using these books.A market for second hand textbooks raises the price of textbooks because some people are not able and willing to buy new textbooks but are willing to buy second hand textbooks. In the absence of such a market, they'll spend their income on other goods that they deem more important. Think of it otherwise this way. In the absence of a market for used textbooks the full value of a textbook is not exploited because some people who would wish to trade with one another cannot trade with one another. If there wasn't a used good market( ρ=1), the editor would have to satisfy a constant demand, and you solve it just for one period (which will stay the same afterwards). The price for new books will be below the one you calculated above. On the consumer (student) side, they would have greater resistance to buy books that cannot be resold. There would be pressure placed on the professor to find cheaper alternatives. In other words, there should also be an effect on total demand, on top of the competition with old books. - Brian Romanchuk Apr 25 '17 at 21:20In used car and second hand book similar consumer behavioral characteristics view, a buyer wants a way to make revenue back on the initial investment of a car, if this isn't possible ( a used car market doesn't exist) then the car buyer may find another investment opportunity and avoid cars altogether. However, without a used car market, demand for new cars would increase, presuming cars are a necessity, and so therefore would the price. The price of new cars could possibly reduce if there is a used car market as the dealers will want new stock leaving so that they don't stop trading.