By 2020, automobile market analysts expect that the demand for electric autos will increase as buyers become more familiar with the technology
However, the costs of producing electric autos may increase because of higher costs for inputs (e.g., rare earth elements), or they may decrease as the manufacturers learn better assembly methods (i.e., learning by doing). What is the expected impact of these changes on the equilibrium price and quantity for electric autos?
A) Unambiguously higher equilibrium price and quantity
B) Unambiguously higher price, and equilibrium quantity may be higher or lower
C) Unambiguously higher quantity, and equilibrium price may be higher or lower
D) We cannot form any unambiguous expectations for either price or quantity
D
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Why does the absence of well-defined property rights serve as a stumbling block for the application of the Coase theorem?
What will be an ideal response?
If the supply of money increases as a result of an open market ______ of securities by the Fed, the interest rate will ______.
a) sale; increase b) sale; decrease c) become flatter d) none of the above