Cars

            When considering supply and demand for automobiles, one must take into account its .
             economical value, reliability, gas efficiency,insurance costs and whether the vehicle is .
             domestic or imported. There are some of the main factors that play a major part in .
             determining the supply and demand analysis in certain vehicles. While the dealer prices are .
             the prices (costs) that the dealership has to pay to have the vehicles in their dealerships. .
             Prices in which dealerships base their vehicles on are known as sticker prices. Therefore, .
             the dealership's profits would be the difference between the sticker and dealer prices. .
             Car dealerships use target prices to forecast an ideal price for selling each of their .
             vehicles. If they manage to sell equal to or above their target price, they can then make .
             arrangements to raise the sticker price of their vehicles for a much-needed increase in .
             profit the next fiscal year. The manufactures also inform dealerships whether or not a .
             specific type of car was in high demand. If the target prices were not met, then that would .
             serve as an indication that the sale price was inaccurate. The MSRP cannot be changed .
             due to a fluctuation in the market as opposed to target prices. .
             Although the increase trend in sticker prices was relatively the same for luxury vehicles, .
             their prices had a tendency to be higher than others. Such as, the Mercedes-Benz S600 .
             model had a sticker price of $78,950 with a dealer price of $73,424. The following year, .
             there was a price increase from anywhere between $1,000 and $1,500. This may have .
             been due to a supply shortage this model; which also meant that people were willing to .
             pay more for the car even with a lower discount price because there are not as many that .
             are manufactured. The rise in dealer prices could also be an indication of an increase in .
             labor and materials cost due to the overall inflation in the economy. .
             There is a high consumer demand for imported compact cars due to their reliability .