Economics of the Industry
Discuss the Supply and Demand of the Automotive Industry.
In the early years of the automotive industry, the demand for these vehicles was very small seeing that only the wealthiest could afford to own one. However, once it became easier for manufactures to put together the cars (I.E. Henry Ford's assembly line), these cars became more accessible to the general public although not nearly as accessible as they are now. Supply was also very small because there were not many manufacturers at the beginning of the automotive industry. Further into the 20th century, cars became more and more of a necessity as villages became towns and towns became cities. As the demand heightened, so too did the supply. More and more manufacturers began to pop up and there was even a city (Detroit) completely devoted to the automotive industry.
Today, the automotive industry is at its peak as cars have become a necessity rather than a luxury. The demand however has shifted recently from huge, gas-guzzling cars, to eco-friendly, efficient cars. The demand for cars overall is fairly inelastic because a car is a necessity. However, if we are looking at car companies as individuals, there products are typically very elastic because most people (aside from those who can afford it) will not pay $60,000 for a mercedes benz when they can get a more efficient, cheaper car that shares the same purpose.
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I like your posting about efficient cars and their demand. When we pick a company to talk about in our final paper we should definitely consider one that has good fuel efficient cars and that has developed echo friendly cars.
ReplyDeleteI agree too with Stanislava's opinion.
ReplyDeleteMore and more automobile companies are now trying to produce echo-friendly cars(such as hybrid cars), but I hope to see the companies also producing it ethically as well, not just wanting to produce cars indiscriminately for profit making!