Type: Economics
Pages: 2 | Words: 441
Reading Time: 2 Minutes

The introduction of new hybrid automobiles in the automobiles industry will shift the supply curve to the right. Similarly, the consumers will have excitement over the new hybrid automobiles, which are more efficient than the current ones. This means that the demand for the new hybrid automobiles will also increase, shifting the demand curve to the right.

Price level

Quantity Demanded

This indicates that the change in the price level will depend on the degree of shift in the supply and demand for the new automobiles, but the equilibrium quantity will increase due to the outward shift of the point of equilibrium.

When income of consumers increases, the purchasing power will increase, making the demand curve shift rightwards. Since the supply is constant, both equilibrium price and quantity will increase.

Price levels

Quantity Demanded

A decrease in the cost of borrowing will increase the purchasing power of consumers. This increases demand for the automobiles at constant supply. There will be a shift in the equilibrium price and quantity as in the diagram for the increase in income.

When the price of batteries in the production of these vehicles decreases, the supply of automobiles will increase. At constant demand, the equilibrium price will reduce. The equilibrium quantity will increase.

Price levels

Quantity Demanded

A reduction in gasoline prices will lead to a shift of the demand curve to the right. People will demand more automobiles than before due to the low cost of gasoline, which is a complimentary commodity. Equilibrium price and quantity will rise.

Price Elasticity and Inelasticity

A Box of Cereals Sold In a Grocery Store

This is a price inelastic, since it is a basic need. A change in the price level will not affect the demand from consumers.

Gasoline as a Commodity

Gasoline is price inelastic as it is a key requirement in the automobiles industry. A small change in price will not affect the quantity that consumers demand.

Gasoline at a Local Gasoline Station

This is a price elastic commodity. Stations from other parts offer the same commodity at relatively lower prices than the local gas station.

Fast Food Sold at a Restaurant

It is price elastic since people have other options of accessing similar food, either at other restaurants or in their homes.

Hotel Rooms for People Planning a Vacation

Price elastic, since these people have the time to search for alternative hotel rooms that offer similar services at lower prices than the high price hotel.

Hotel rooms for people on business to meet an important client

They are price inelastic because of the urgency of the event of the people demanding the hotel rooms.

Clothes Sold In a Discount Retailer

They are price elastic because clothes are not basic needs, and people can get similar clothes at other shops in town.

Copy-pasting equals plagiarizing!

Mind that anyone can use our samples, which may result in plagiarism. Want to maintain academic integrity? Order a tailored paper from our experts.

Get my custom paper
3 hours
the shortest deadline
original, no AI
300 words
1 page = 300 words
This is a sample essay that should not be submitted as an actual assignment
Need an essay with no plagiarism?
Grab your 15% discount
with code: writers15
Related essays
1 (888) 456 - 4855