Economics of the Automobile Indusstry

Economics of the Automobile Industry Industry Research Completion A vehicle is one of the biggest purchases a person leave invariably make. Over the years, the prices of an cable car have increased due to the demonstrate of inflation. Due to a price index, the price of an automobile adjustments every(prenominal) over a certain period of time. Economists compare averages of automobiles to calculate the bell of each vehicle that presents itself on a car lot. When completely of the above is calculated within the purchase of an automobile, it affects every field of making the automobile to selling the automobile. All of these instruments are force together for the automobile industry as a whole. In the automobile industry, there are factors that cause a sackful in the return and price elasticity of the supply and demand. These factors go off cause the supply demand to reduce or contribute the demand for the automobiles. One factor to consider is if the price of brace rises. Automobile manufacturers exit then produce fewer automobiles at all different price levels and the supply curved shape go away then shift. Another factor to consider is if automobile workers locate to go on strike for higher wages. The company will be forced to pay more for labor to wee the same number of automobiles. The supply of these automobiles will decrease.

Lastly, another factor that can curve a shift in the supply curve could be if the government imposes a new taxation on car manufacturers. In all of those cases, the supply curve will move because the quantity supplied is lower at all price levels. As the supply curve moves in the automobile industry, the equilibrium price and quantity sold will change with this shift. When the automobile manufacturers see this shift in supply, they will then raise their prices and the quantity sold will fall. Car manufacturers will also develop better technology for the automobiles being sold. For example, patronage in the 1980s automobiles were introduced with compact disc players. (OSullivan & Sheffrin, 2005,... If you extremity to get a full essay, order it on our website: Ordercustompaper.com

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