Economics of the Automobile Industry Essay -- Vehicle Car Economy

A vehicle is one of the biggest purchases a individual go forth ever make. Over the years, the hurts of an automobile have increased imputable to the rise of inflation. Due to a price index, the price of an automobile adjustments oer a certain period of time. Economists compare averages of automobiles to calculate the cost of apiece vehicle that presents itself on a car lot. When all of the above is figure within the purchase of an automobile, it affects every area of making the automobile to merchandising the automobile. All of these factors are impacted together for the automobile industry as a whole. In the automobile industry, there are factors that cause a shift in the supply and price elasticity of the supply and require. These factors commode cause the supply demand to reduce or order the demand for the automobiles. One factor to conduct is if the price of steel rises. Automobile manufacturers will then produce fewer automobiles at all different price levels and the supply curve will then shift. Another factor to consider is if automobile workers decide to go on strike for higher wages. The community will be forced to pay more for labor to figure of speech the same number of automobiles. The supply of these automobiles will decrease. Lastly, another factor that basis curve a shift in the supply curve could be if the government imposes a new tax on car manufacturers. In all of those cases, the supply curve will move because the quantity supplied is move 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... ...asticity of Demand. Retrieved celestial latitude 3, 2011, from http//www.mackinac.org/article.aspx?ID=1247Mason, P. (1998, June). Race, cognitive ability, and wage. Retrieved January 14, 2012, from http//findarticles.com/p/articles/mi_m1093/is_n3_v41/ai_20809842OSullivan, A., & Sheffrin, S. (2005). Economics. Upper Saddle River, New Jersey Pearson learner Hall.Spatz, J., & Nennenkamp, P. (2002, January). Globalization of the automotive industry-traditional locations under pressure. Retrieved January 14, 2012, from http//www.uni-kiel.de/ifw/pub/kap/2002/kap1093.pdfThe Social Studies Help centre (n.d.). Monetary and Fiscal Policy. Retrieved November 5, 2011, from http//www.socialstudieshelp.com/eco_mon_and_fiscal.htmWhitehead, J. (2006, May 8). Price elasticity of demand. Retrieved December 3, 2011, from http//www.env-econ.net/2006/inelastic_short.html