1. Consider the market for cars. Explain what will happen to the supply of cars if there is an improvement in car manufacturing technology. How does price, quantity, producer surplus, and consumer surplus get affected (increase or decrease)? Do we know for sure if producer surplus will increase or decrease? Now assume that the city builds new bike paths and increases the demand for biking, what will happen to the demand for cars? What happens to the price and quantity of cars?

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Impact of Technology Improvement and Bike Paths on the Car Market 1 Technology Improvement Supply of ... View the full answer