Reference no: EM133791759

Part 1: When it comes to the electric vehicle EV market, we can analyze a shift in the supply curve due to advancements in battery technology. Over recent years, significant improvements in battery efficiency and reductions in production costs have allowed manufacturers to produce EVs at a lower cost. This technological advancement acts as a shifter for the supply curve. The supply curve shifts to the right, an increase in supply, because producers are now able to offer more electric vehicles at every price level. The main shifter affected here is "technology," which enhances production capabilities and reduces costs. As the supply curve shifts to the right, we need to consider how this affects equilibrium prices and quantities in the market. Initially, let's assume that demand for electric vehicles remains constant. When the supply increases due to technological advancements 1. Equilibrium Quantity-The quantity of electric vehicles sold in the market will increase because there are more vehicles available at each price point. 2.
Equilibrium Price - The price of electric vehicles will decrease as a result of increased competition among manufacturers and an oversupply relative to demand at previous price levels. Through examining the electric vehicle market as an example where supply shifted due to technological advancements, we see that the supply curve shifted right due to improved battery technology. This resulted in an increase in equilibrium quantity and a decrease in equilibrium price for electric vehicles. The probability that this analysis is correct is high based on current trends observed within the automotive industry.
According to Ganti, (2023), "Change in supply refers to a shift, either to the left or right, in the entire price-quantity relationship that defines a supply curve. Essentially, a change in supply is an increase or decrease in the quantity supplied that is paired with a higher or lower supply price. A change in supply can occur because of new technologies, such as more efficient or less expensive production processes, or a change in the number of competitors in the market. A change in supply is not to be confused with a change in the quantity supplied" (Ganti, 2023, p.110-112).
According to Thomas, (2022)," When modeling markets, economists make assumptions about the characteristics of the market they are studying. Depending on these assumptions, their model's predicted outcomes will differ. The most basic version of the supply and demand model is perfect competition. In a model of perfect competition, the key assumptions are: there are many buyers and sellers in the market. There is free entry and exit in and out of the market. A homogenous product is being bought and sold. Each product is identical. Buyers and sellers have perfect information about the product. No individual seller can unilaterally change the market price. Sellers are price takers"(Thomas, 2022, 450).

Part 2: Back in 2020, at the top of the pandemic, I recall many items such as paper towels, tissue, and water changed in supply and demand. These were once easily accessible items, but after entering the pandemic, we experienced an often scary decline and limited ability to purchase issues with these once readily available items. The word demand has a precise meaning in economics. It refers to the willingness and ability of buyers to purchase different quantities of a good, at different prices, during a specific period (Arnold, 201U, pg. 5U). In economics, the word supply refers to the willingness and ability of sellers to produce and offer to sell different quantities of a good, at different prices, and during a specific period (Arnold, 201U, pg. CU).
Due to the pandemic and the decline in having goods on hand, the demand curve shifted. The factors that can shift the demand curve are income, preference, prices of related goods, the number of buyers, and expectations of future prices (Arnold, 201U, pg. CC). As a result of consumers increasing their purchases due to the fear of running out of price inflation, the demand increased and caused a rightward shift in the demand curve. The
"Law of One Equilibrium Price" states that sellers of homogeneous goods will charge the same uniform price in a competitive equilibrium, but this law rarely holds in practice. Price dispersion is the norm in relatively homogeneous goods industries, and it is well that both high-price and low-price sellers regularly make positive sales at different prices (Noel & Qiang, 2023, pg. 2).
Equilibrium prices for those general items did change. We noticed prices were higher for items and the quantities available for purchase were also lower. The increase in demand for these items and the decrease in supply made these items highly needed by consumers and thus affected the equilibrium price and quantity availability.