Final answer:
If the price of plastics decreases due to technological improvements, car manufacturers may substitute more plastics for steel in the production of body panels for automobiles. This can result in lower production costs and lower prices for automobiles, leading to an increase in the demand and quantity demanded for cars.
Step-by-step explanation:
If the price of plastics decreases due to technological improvements, it is reasonable to expect that the demand for plastics will increase in the production of body panels for automobiles. As a result, car manufacturers may choose to substitute more plastic for steel in the production process. This shift in input substitution can lead to a decrease in the demand for steel and an increase in the demand for plastics. Additionally, the decrease in the price of plastics may also result in lower production costs, which can lead to lower prices for automobiles.
For example, if the price of plastics decreases, car manufacturers may decide to use more plastics in the production of body panels. This can result in lower costs for the production of body panels, making cars cheaper to produce. Consequently, car manufacturers can pass on these cost savings to consumers by reducing the price of automobiles. This can lead to an increase in the quantity demanded for automobiles as consumers find them more affordable.
In summary, if the price of plastics decreases due to technological improvements, it is reasonable to expect that car manufacturers may substitute more plastics for steel in the production of body panels. This can result in lower production costs and lower prices for automobiles, leading to an increase in the demand and quantity demanded for cars.