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The availability of credit and hire purchase facility tends to push up the demand for consumer durables. In India for consumer durables lie Refrigerators television scooters etc, hire purchase facility is available. In western countries the extension of credit is used as sales promotion measure. Among the manufactures the Indian sewing machines company manufacturers of singer claim to have pioneered hire purchase in India ( Business India). Hawkins pressure cookers are also available on hire purchase basis. The intensified competition between car and two wheeler manufacturers has lead to many firms extending credit for their purchases.
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Figure 3.7 in the above textbook. Using the figure in guide, determine the approximate size of the market surplus or shortage that would exist at a glance of a) $40 b) $20
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