Final answer:
An automobile manufacturer that increases the number of cars produced without increasing production costs has increased its efficiency, which refers to producing more with the same inputs.
Step-by-step explanation:
When an automobile manufacturer increases the total number of cars produced without raising production costs, this suggests an improvement in the production process that allows for more units to be created for the same total cost. Therefore, the manufacturer increased its efficiency.
Efficiency in this context refers to the manufacturer’s ability to produce more output (cars) without an increase in input (production costs).
This is often achieved through better use of resources, improved technology or processes, and innovations that reduce waste and production time.
Discussing the concept of efficiency within the automobile industry can also be linked to scenarios where the cost of inputs changes.
For example, if the price of steel decreases, producing a car becomes less expensive, and manufacturers can supply a higher quantity of cars for the same price or less. This is represented by a shift of supply curve to the right, indicating an increase in the quantity supplied at each price level.