The automotive industry is a worldwide industry that involves itself in the manufacture of motorcycles, trucks, vans, buses and coaches among many other products including the spare parts of the above-mentioned commodities. There are many companies involved in this industry, including BMW, general motors, Honda, Suzuki, and Kawasaki among many others.
In the analysis of the above-mentioned industry, I will look at the motor cycle's section of the motor (automobile) industry. The motor cycle industry has been in existence in the world for almost over a decade now. The industry has experienced its vicissitudes over the years but its growth over the last two decades has been remarkable. The industry had its lowest performance index during the great depression of 1929-1935 but ever since, it has grown by leaps and bounds.
The industry's worldwide growth in production, sales, and profit margins for the past four years has also been marvelous. Almost all industry players including Harley Davidson, Honda, Kawasaki, and Suzuki among others recorded from modest to remarkable sales within this period of time.
Shifts and price elasticity of supply and demand
Some products are highly responsive to price changes while others are not. In some commodities Low price changes does not make a server change in the quantity purchased, Economists say that the demand for such products if relatively elastic or simply elastic. For other products Substantial price changes, because small changes in the amount purchased, the demand for such products is relatively inelastic or simply inelastic (Mankiw).
This is the general scenario for most normal goods. In the motorcycle industry, ...