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Consider the market for cars. Which determinant of supply is affected by each of the following events? a. A steel tariff increases the price of steel O Prices of inputs O TechnologyO Prices of related goodsO ExpectationsO Number of sellers

User Suxgri
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Answer:

Explanation: a. A steel tariff increasing the price of steel affects the determinant of supply related to the cost of production. As the price of steel rises, the cost of producing cars increases, reducing the profitability of producing them. This, in turn, reduces the quantity of cars supplied in the market.

b. Prices of inputs, such as labor or materials, affect the cost of production and therefore the supply of cars. An increase in the prices of inputs increases the cost of producing cars, reducing the profitability of producing them, and resulting in a decrease in the supply of cars.

c. Technological advancements can increase the efficiency of the production process, reducing the cost of producing cars, and resulting in an increase in supply.

d. Prices of related goods, such as trucks or motorcycles, can affect the supply of cars. If the price of trucks increases, for example, car manufacturers may switch to producing trucks instead, reducing the supply of cars.

e. Expectations of future prices or market conditions can affect the supply of cars. If car manufacturers expect prices to rise in the future, they may reduce the supply now and hold onto inventory, anticipating greater profits later.

f. The number of sellers in the market can affect the supply of cars. An increase in the number of sellers can lead to greater competition and more supply, while a decrease in the number of sellers can lead to less competition and less supply.

User Khyati Elhance
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