The automobile industry has brought the United States economic growth due to the impact that automobiles have made on society. There has been a plethora of jobs associated with the auto industry, including manufacturing, auto repairs, insurance, and the development of roads, sales, and auto parts to enhance vehicles. Cars, trucks, and SUVs’ have become a way of life for people and have made an additional economic impact by becoming the primary means of transportation for consumers to commute to and from work, vacations, and travel between destinations. Most family households live on a budget and they must make the decision of how much of their budget they can allocate to transportation costs.
The automotive industry is considered elastic as the prices fluctuate depending on supply and demand. This product, the automobile, has become a necessity of life in current day, whereas at its inception, owning a vehicle was a luxury. At that time, because there were other means of transportation the automobile demand was low making the price of autos elastic. As the auto industry grew over the years the demand became increasingly higher, more so when there was the onset of different makes and models of vehicles. While the demand for vehicles increased, the price remained stable for a time making the demand inelastic because there was not much change in the price. In current times consumers can choose from a vast amount of makes of vehicles with as many models that although the auto itself has become a necessity, some cars could be considered a luxury. For instance, it may be necessary to own a vehicle however, not a necessity to have it equipped with a sunroof, navigation systems and DVD players. Another factor that directly affects the supply and demand of autos is the price ...