What would happen in the market for car tires if there was an increase in the price of rubber used to produce tires and a decrease in the price for...

As prices
decrease, demand increases. A drop in the price for cars will increase the demand for cars and,
therefore, sales of cars. The question assumes that increases in tire prices, which would drive
up new car prices, still result in a net decrease in car prices. As new car sales increase, the
demand for tires would increase, as well, further driving up tire prices.

At
some point, given consistent supply, there would be equilibrium in the marketplace for cars as
tire prices rise to offset the reduction in new car prices. But there is more to this than the
effect on new car prices and tires that come equipped on new cars.

There is
a market for tires outside the new car market....