This explains why we would see large e ects of gasoline price changes on the prices of used cars. What market share e ects should we expect to nd? In used cars, we might expect to see rather small market share e ects for the following reason. An owner of a low fuel e ciency car may wish to respond to an increased gasoline price by selling her current car and replacing it with a high fuel e ciency car. Alas, the price that the owner can obtain for the low fuel e ciency car will have fallen just at the time that she wishes to sell the car or trade.
