semi truck tires prices
I need HELP w/MICROECONOMICS homework?
1. What effect will each of the following have on the supply of automobile tires?
a. A technological advance in the methods of producing tires.
b. A decline in the number of firms in the tire industry.
c. An increase in the price of rubber used in the production of tires.
d. The expectation that the equilibrium price of auto tires will be lower in the future than it is currently.
e. A decline in the price of large tires used for semi-trucks and earth hauling rigs (with no change in the price of auto tires).
f. The levying of a per-unit tax in each auto tire sold.
g. The granting of a 50-cent-per-unit subsidy for each auto tire produced.
geeee tough one. will try. here we go
a - new production techniques. save cost and max profit
b - maybe becomes a tripoly, duopoly, oligopoly or controlled market. it will be a seller's market controlling prices. buyers have little option but to pay high prices
c - tire prices up
d - maybe. doubtful. with inflation and greed of capitalists - it will keep going up. temporary downs
e - demand has slacken. to attract more buyers of such tires as contractors/builders/such companies would use the tires till it breaks apart. to attract more sales
f - price up
g - sales will go up if subsidy is passed on to consumers. those stinging on tyre change will now change
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