The battery packs used in electric and hybrid automobiles are one of the largest cost components for manufacturing these cars. As the price of these batteries decline, we expect that the:

A) supply curve for electric and hybrid autos will shift rightward.
B) supply curve for electric and hybrid autos will shift leftward.
C) demand curve for electric and hybrid autos will shift rightward.
D) demand curve for electric and hybrid autos will shift leftward.

Question

Sayuri Coria · Accepted Answer

Final Answer : A, Explanation :  As the cost of battery packs declines, the cost of producing electric and hybrid automobiles decreases, which in turn decreases the price of these cars. This leads to an increase in the quantity of electric and hybrid autos supplied at every price, causing the supply curve to shift rightward.

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