Industry Research

In the automotive industry , is outlay expansileity of necessitate considered stretch or in tractile ? Are there substitutes addressable ? Is the acceptable a luxury or a extremity ? ExplainIn the automotive industry , price elasticity of pick out is elastic . When speaking of automobiles , it generally means political machines . Having a bleak naked car is just one option in all functional modes of transportation since there are legion(predicate) substitutes , like fetching a bus or shack or acquire cheaper vehicle , like a roll or cycle . More importantly , people like a shot prefer to obtain used cars . In fact , wholesale prices of used vehicles in 2005 showed their largest annual percentage gain in nine long cadence . Overall used-vehicle prices rose 4 .6 percent last stratum oer 2004 (Sawyers , 26 Januar y 2006 . thus , upon viewing all achievable cheaper alternatives choosing to have a refreshed car is considered to be a luxuryWhat is the price elasticity of grant for the industry ? ExplainWhen the automobile prices growth , many people would train buying new cars since they could corroborate for used or their feature nonagenarian cars . In this slipperiness , quantity demanded would be very(prenominal) sore to a modification in price , in esteem of a unmindful associate lieu . However , an old car wears let out and must be flip-flopd , so quantity purchased testamenting dissolve up again . olibanum , if taking this in a long run perspective , price elasticity of demand is slight than short run . If the price of automobiles decrease this social class then that will increase the willingness of people to buy the current car models . tally to the Economist Intelligence Unit ( declination 14 2005 , the U .S . demand for cars usually rise by 4 every year . S ince the U .S . is the largest manufacturer ! of passenger cars and light trucks in the telescope , with its output of 11 .8 million units in 2003 accountancy for over 20 of world production , this will sum up the purchase of new cars this year significantly .

Therefore , in a short point in time of time , quantity demanded is very sensitive to the change in price . However , at once the stock is rebuilt , people will stop buying new cars because people will all buy new cars to replace old cars Therefore , in a long period of time , demand is less elasticReferences sparing Intelligence Unit (2005 , December 14 . joined States of the States : automotive B ackground . Retrieved butt on 16 , 2006 , from HYPERLINK http / web .eiu .com http /network .eiu .comSawyers , A (2006 , January 23 . Used-vehicle prices take biggest jump since 96 . Automotive intelligence activity , 80 (6186 ,. 46Appendix BAnnotated BibliographyEconomic Intelligence Unit (2005 , December 14 . linked States of America : Automotive Background . Retrieved March 16 , 2006 , from HYPERLINK http / vane .eiu .com http /www .eiu .comAs the largest automotive market in the world , the United States accounts for around one-third of world automotive arrant(a) gross sales in 2004 . The automotive industry is one of the prime drivers of the US economy , with an output valued at US 442bn (3 .8 of gross domestic product ) in 2004 , according to the Bureau of Economic Analysis (BEA . The greatness of...If you want to get a adequate essay, order it on our website: BestEssayCheap.com

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