Impact of Technology on Market Equilibrium in the Automotive Industry

Economics
4/7/2019

Economics 1
Contents
Introduction......................................................................................................................................2
Market equilibrium..........................................................................................................................3
Supply and demand curve............................................................................................................3
Technology Influencing Supply Curve............................................................................................4
Technology Influencing demand curve...........................................................................................5
Implication of this technology on the economy as a whole.............................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Economics 2
Introduction
The aim of the report is to explore the understanding as well as concepts that are linked to the
microeconomics. Microeconomics is considered as the branch of economics that study about the
behaviour of the firms as well as the individual that form the decision related to the use of scare
resources. The report includes the discussion of the ways through which the technology creates
the impacts on the equilibrium in product markets. In addition to this, it includes the elaborate on
the possible implications of the technology on economy as whole. The industry on which the
report focuses is automotive industry and links all the concepts with the Microeconomics.

Economics 3
Market equilibrium
The market equilibrium is a term that can be defines as the market point where request of the
customer is equal to the source of the product. In the market, the point of equilibrium is straight
linked with the influences of request as well as supply (Altman, 2017). The introduction of new
technology in automotive can directly create the impact on the market equilibrium.
Supply and demand curve
The curve of supply and demand can be presented in form of graphical demonstration of quantity
as well as value. The price in the graph is presented by y-axis and quantity on x-axis (Buckley,
2016). The outline of the original knowledge will lead to direct influence on supply as well as the
demand curve and this affect will shift the demand curve either up or down.
The impact of the shift in the supply and demand curve equilibrium can be explained with the
help of the below given table with the introduction of new technology.
Shift in the Demand curve (When supply of the product is unchanged)
Shift to right It will lead to the upsurge in the demand that makes equilibrium to rise.
Shift to left It will lead to reduction in the demand that is one of the reasons for
reducing in the equilibrium.
Shift in the Supply curve (When Demand of the product is unchanged)
Shift to right It will lead to the upsurge in the source that makes the equilibrium to
decrease.
Shift to left It will lead to reduction in the supply that is one of the reasons for