Automobile Demand and Supply Analysis in India

1.  Increased demand for a product or service will usually result in lower prices for the item.  FALSE

viii) This may be determinate of the given situation: For example, when gas prices skyrocketed people started looking for alternatives to circumvent the elevate prices. In states like Texas, Utah and Oklahoma, people started to invest in vehicles that used natural gas as an alternative fuel. Because of the cheaper price of natural gas, the demand for these types of vehicles went up, driving up prices for new and used vehicles. Once the price of a gallon of gas under a certain price,

The position of the demand and supply curve will shift to the left or right following a change in an underlying determinant of the market. The number of oil people consume during this period decreased because after the change of the season, there will be less number of people willing to drive in winter. Complementary good, is a good 's demand is increased when the price of another good is decreased. Conversely, the demand for a good is decreased when the price of another good is increased. As transportation and Oil are complementary goods the demand of oil will also fall, which lead to the fall in price. It mean that the demand shifted to the left. Refer to Figure 1.

When quantity supplied do not equal quantity demanded the outcome is either excess supply or excess demand, and a tendency for price to change. As this happen the consumers will increase their quantity demanded, and the movement toward equilibrium caused by excess supply is both the supply and demand sides. When the excess supply occur quantity supplied is greater than quantity demanded. While the reverse of excess demand quantity demanded is greater than quantity supplied. The excess demand pushes prices upwards in decreasing the quantity demanded and increasing the quantity supplied. This movement takes place along both the supply curve and the demand curve.

If the oil price will rise, the demand of auto industry will decrease. We will measure the responsiveness in the demand for commodity to a change in the price of commodity. The cross-price elasticity of demand is very important concept in managerial decision-making. Firms often use this concept to measure the effect of changing the price of a product they sell on the demand of other related products that the firm also sells. A high positive cross-price elasticity of demand is often used to define an industry, since it indicates that various commodities are very similar.

Changes in price of related goods- There are two types of goods- complements and substitutes. In Starbucks coffee and salad are substitutes. With the increase in price of coffee the demand for salad will increase and vice-versa. Coffee and cakes are complements. With the increase in price of coffee the demand for cakes will also decrease and

The determinants of demand can causes some effects on demand curve . if demand increases this leads

we must turn to economics to explain why demand has increased. Demand refers to how much of

With the recovery of economy, the world’s automobile industry has been growing steadily over the past few years. According to Bloomberg, the US automobile sales climbed from its depth 10.4 million in 2009 to over 15.6 million in 2013. Furthermore, industry analysts predict that the sales will

The aspirin example shows what happens to the demand for good B when the price of good A increases. Manufacturer A's price having increased, demand for its aspirin product (for which there are many substitute goods) decreases.

21. Other things held constant, the greater the price of a good A. B. C. D. the lower the demand. the higher the demand. the greater the consumer surplus. the lower the consumer surplus.

It is assumed that in economics customers are rational decision maker and their demands affects a company’s business decision. It can be said that if a price for a particular increases and he or she is cognizant of all the pertinent information, demand will lessen for that product. Should price decline, demand would increase.

India produced cheap, reliable and safe automobiles. The U.S big three’s on the other hand, produced

As mentioned earlier Tata Motors being the largest automobile firm in India, it is admired to be the most reliable and futuristic manufacturers in today’s world. Tata vehicles and their new cars are preferred globally for their advanced technologies and handiness with over 130 models of passenger vehicles and trucks which tend to boost the Indian market internationally. Tata Motors have various core competencies that further make it different from others in the market place. As stated earlier, a core competency for Tata Motors is the acquisition of jaguar and Land Rover in order for an expansion internationally, directly giving them an ultimate competitive

Using a supply and demand framework, I will examine the impact on the equilibrium price and quantity of a product (or service) of an increase in the number of consumers in the market. This is due to my basic knowledge of the fact that when consumers demand for a good or service increases, the supplier has to increase their output to match requirements of the consumer. Overall this means as demand increases, so does supply to meet the need of consumers in those specific markets.