Question: XYZ Corporation manufactures a family-oriented SUV.

1. If the company adopts a new technology that increases production efficiency, what happens to the equilibrium quantity and price of the vehicle? What happens to the supply and/or demand curves?
2. If consumer income goes up, what happens to the equilibrium quantity and price of the SUV? What happens to the supply and/or demand curves?
3. If the cost of steel goes up, what happens to the equilibrium quantity and price of the SUV? What happens to the supply and/or demand curves?
4. If the price of gasoline increases from $2.50 to $3.00 a gallon, what happens to the equilibrium quantity and price of the SUV? What happens to the supply and/or demand curves?
5. If competitor ABC Automotive reduces the price of its SUV, what happens to the equilibrium quantity and price of XYZ’s SUV? What happens to the supply and/or demand curves?

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Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document