Gasoline prices above $3 per gallon have affected what enterprise rental car co. can charge for various models of rental cars. suvs are $37 with one-day return and subcompacts are $41 with one-day return. why would the equilibrium price of suvs be lower than the equilibrium price of subcompacts?

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Business

Rene Montoya

14 February, 10:27

Gasoline prices above $3 per gallon have affected what enterprise rental car co. can charge for various models of rental cars. suvs are $37 with one-day return and subcompacts are $41 with one-day return. why would the equilibrium price of suvs be lower than the equilibrium price of subcompacts?

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Cindy Carter · Answer 1

Because gas price increases drive people to rent smaller, more fuel-efficient cars, there would be an increase in demand that would raise the equilibrium price.