The automotive industry includes the development, model, manufacture, marketing, and trade of motor vehicles. In the 20th century automobiles have increasingly developed the world and changed the way individuals do business and travel. Automotive fabrications are amongst the biggest companies within the world. Many of the automotive companies have manufacturing plants and subsidiaries in several countries worldwide. In the United States the three main automobile manufacturers are Ford Motor Company, General Motors, and Chrysler. In the automotive industry these companies supply a great deal of direct employment within the U.S. Today, foreign auto producers have become increasingly popular in the country. The United States and Japan are among the highest countries producing motor vehicles. From the existence of motor vehicles the economy has been a major influence in the success of the industry. To explore further about the automotive industry and the economy this essay will discuss the affects of shifts and price elasticity of supply and demand and wage inequality within the automotive industry.
[...] The automotive industry produces private goods. Private goods are considered to be excludable and rivals. A car is excludable since a car is individuality used and would suspend the availability and usage for another person to use. The automotive industry highly affects the economy. The automobile industry has many positive and negative externalities. The automotive industry produces cars which have positive externalities. Individuals use cars to attend school and keep a job. Transportation can be necessary for the economy to remain strong. [...]
[...] The biggest economic influence that negatively affects the automotive industry within the United States is the prices of gas. In the first quarter of 2008 the gas prices increased by 15%. At the gas pumps prices went from roughly $ 3.10 to $ The economic cause of high gas prices is from the increasing prices of crude oil. Crude oil accounts for approximately 50% of the gasoline prices. The rising price of gasoline has caused consumers to consider purchasing hybrids cars instead of midsize and large SUVs. [...]
[...] The automotive industry is considered elastic. The prices change depending on supply and demand. The price elasticity of demand in India's automotive industry at this time is elastic. Previously, in India cars would be a luxury since there are several other forms of transportation such as motorcycles and scooters. Therefore, the automotive industry was confined in car growth within the country. Nearly 50 years ago the Ambassador car was developed and was among the first Indian cars. In those days cars were definitely considered a luxury in which only a few households could afford to buy a car. [...]
[...] In the future the economy will continue to affect the success of the automotive industry. References Cimpean, A. Automobile history: Chevy Nova. Helium. Retrieved on April from http://www.helium.com/items/954336-industry-strictly-related- automobile Datelle, D. (1997, October, 1). Democratic Leadership Council. NAFTA's Effect on U.S. Jobs. Retrieved on May from http://www.dlc.org/ndol_ci.cfm?kaid=108&subid=127&contentid=1391 GAO. (2007, August 3). Vehicle Fuel Economy: Reforming Fuel Economy Standards Could Help Reduce Oil Consumption by Cars and Light Trucks, and Other Options Could Complement These Standards. Retrieved May from MasterFILE Premier database. [...]
[...] The automotive industry highly influences the economy market and economic welfare. Continuing to examine the automotive industry the next factor is wage inequality. Wage inequality is definitely an issue in the automotive industry. The auto industry in Ohio is facing economic challenges. In Ohio, a House speaker is encouraging Delphi Corp. and automobile business employers to invest in their factory and maintain jobs in Ohio. A Cleveland- based research organization claimed the proposed legislation should not move forward since there are many flaws. [...]
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