Saved emand, Supply, and Market Equilibrium What effect will each of the followi
ID: 1134831 • Letter: S
Question
Saved emand, Supply, and Market Equilibrium What effect will each of the following have on the supply of auto tires? ? (keeping all else constant a A technological advance in the methods of producing tires [Cik to seled b. A decline in the number of firms in the tire industry Cisk to select c. An increase in the prices of rubber used in the production of tires. Cick to seleal d The expectation that the equilibrium price of auto tires will be lower in the future than currenty [Click to selecl e. A decline in the price of large tires used for semi trucks and earth-hauling rigs. a substitute in production (with no change in the price of auto tires) Cek to sele t The levying of a per-unit tax on each auto tire sold: Cick to sleci 9. The granting of a 50-centper-unit subsidy for each auto tire produced E Increase No chang DecreaseExplanation / Answer
a. INCREASE
A technological advance in tire production will increase the quantity of production.
b.DECREASE
a decline in the number of firms would reduce the overall production of tires and hence its supply.
c.DECREASE
As rubber is one of the sources of production, increase in its price would make production expensive and hence, reduce the supply.
d.NO CHANGE
As the possibility of price going down is in future.
e. No change
As supply is affected by the price of commodity being supplied according to the law of supply.
F. DECREASE
As no one wants to pay higher tax, it will reduce their profit.
G.INCREASE,
as the cost of production would decrease.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.