Let D = demand, S = supply, P = equilibrium price, and 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

Government incentives to manufacturers increase the supply of electric vehicles, leading to a decrease in equilibrium price and an increase in equilibrium quantity, while demand remains unchanged.

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