Do you expect happen to domestic auto industry in short run

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Reference no: EM133231979

Assignment:

In general, automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve.

1. What do you expect will happen to the domestic auto industry in the short run? Include one example relevant to the question with your response and at least one reference from the readings in your answer.

2. What do you expect will happen to the domestic auto industry in the long run? Include at least one reference from The Economist or the New York Times to support your explanation in your response.

3. Can you think of a social cost example that is not included in the current auto industry structure that would increase the industry's economies of scale?

Reference no: EM133231979

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