Question #2002597: Other Economics Problems

Question: XYZ Corporation manufactures a family-oriented SUV.

a. If the company adopts a new technology that increases production efficiency, what happens to the equilibrium quantity and price of the vehicle? What happens to the supply and/or demand curves?

b. If consumer income goes up, what happens to the equilibrium quantity and price of the SUV? What happens to the supply and/or demand curves?

c. If the cost of steel goes up, what happens to the equilibrium quantity and price of the SUV? What happens to the supply and/or demand curves?

d. If the price of gasoline increases from $2.50 to$3.00 a gallon, what happens to the equilibrium quantity and price of the SUV? What happens to the supply and/or demand curves?

e. If competitor ABC Automotive reduces the price of its SUV, what happens to the equilibrium quantity and price of XYZ’s SUV? What happens to the supply and/or demand curves?

Solution: The solution consists of 324 words (2 pages)
Deliverables: Word Document

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