Two events occur simultaneously in the market for automobiles: (1)an improvement in assembly line technology and (2)a recession in the economy that decreases consumers' income.Which of the following can be predicted about this market with certainty?

Question

Quizplus · Accepted Answer

An improvement in technology increases supply, which tends to lower prices. A recession decreases demand, which also tends to lower prices. Therefore, the equilibrium price will fall.

Two Events Occur Simultaneously in the Market for Automobiles: (1)an