Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of _______ on demand for his service.

Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of _______ on demand for his service. 



A. break-even points

B. the price inelasticity ratio

C. the income effect

D. the target return effect

E. cross-price elasticity


Answer: C. the income effect


Learn More :