House passes bill to add $2 billion for Cash for Clunkers program.

Source: CNNMoney.com

Date: 7/31/2009

Keys: Marketing, pricing, consumer behavior, economy, government

Link:  http://money.cnn.com/2009/07/31/autos/cash_for_clunkers_update/index.htm?postversion=2009073114

Questions for discussion:

• Explain why you think this program has been overwhelmingly successful in stimulating demand for new car purchases?
• What does price sensitivity suggest to you about why auto sales might have been poor until now?
• Which other categories of consumer products do you think would also respond as dramatically to similar price reductions?
• Do you think governments should help certain businesses – like autos, and not others? Explain your thinking.