What will happen to the market for electric cars

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Reference no: EM133750111

Problem

In this question assume we have monotone demand and supply curves with non- ~ zero and non-infinite elasticity (regular supply/demand). Will equilibrium price and quantity increase, decrease, stay the same, or we can't say in each of the following scenarios? Briefly explain why.

I. Ice cream shops in the Florida Keys have an unusually cold and rainy day compared to their usual conditions. What will happen to the market for ice cream?

II. The government imposes a 50% subsidy for electric cars. What will happen to the market for electric cars?

III. The government imposes a 50% subsidy for electric cars. What will happen to the gasoline market?

IV. During the pandemic, people wanted to more hand sanitizer, as a result, the ~ government provides grants to firms that will produce hand sanitizer. What will happen to the market for hand sanitizer?

V. A flood destroys many of the houses in a town, some of which are not insured. The government has decided that the town is too high risk and won't provide flood insurance to any residents. What will happen to the housing market in this town?

Reference no: EM133750111

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