People are lured by the idea of 50 mile per gallon vehicles, Ask an Expert

Economics

Q. With high gas prices, the demand for hybrid automobiles such as the Toyota Prius also the Honda Civic Hybrid is very high. Dealers are routinely charging over list for these vehicles also the waiting list to get one is as long as three months. People are lured by the idea of 50 mile per gallon vehicles which still perform well also are willing to pay the high prices to get one.

Perform a cost/benefit analysis on the purchase of a Toyota Prius versus a Toyota Corolla. Suppose the Prius sells for $24,000 (the average selling price according to edmonds.com) versus a Corolla which sells for $14,000. Also suppose an average MPG for the Prius of 44 (EPA 2008 Rating) MPG also the Corolla at 32MPG (EPA 2008 rating). Use a gas price of $3.29 per gallon. Suppose 15,000 miles per annum use.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9163787

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