Illustrate what would happen if the government intervened

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Automobile Industry: Demand and Supply Changes

Most of us participate in the economy every day. As households, we can provide labor to firms or government in the input market and we are also consumers of goods and services in the product market. Think of a good that you have purchased in the last six months. If you haven't purchased any goods or services, you can think of some popular items. Find a recent article on that good or the firm that produces it.

Pick an article or good recently purchased, articulately and answer the following questions:

1. Briefly describe the article.

2. Did your demand for the good change? What are some factors that would cause a change in demand for this good? How does quantity demanded of this good change?

3. Give some examples of changes in supply in the context of your good. What would change the quantity supplied?

4. What would happen if the government intervened and lowered the maximum price that could be charged for this service or good. How would this change the output and price?

 

Reference no: EM1337534

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