Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?
A) D increases, S no change, P and Q increase
B) S increases, D no change, P decreases, Q increases
C) D and S increase, P and Q decrease
D) D no change, S increases, P decreases, Q decreases

Question

Quizplus · Accepted Answer

The government incentives will increase the supply of electric vehicles, leading to a decrease in the equilibrium price and an increase in the equilibrium quantity.

Let D = Demand, S = Supply, P = Equilibrium