Suppose there is a sudden increase in consumer demand for electric vehicles in a market economy. Which of the following responses best illustrates how the market system would react?

Question

Answer

Existing manufacturers reduce production to create an artificial scarcity and raise prices.

Answer

The government immediately imposes production quotas to prevent overproduction.

Answer

Manufacturers increase production of electric vehicles.

Answer

Consumers are forced to wait longer due to a shortage of vehicles, with no changes in production.

Crowdly

Suppose there is a sudden increase in consumer demand for electric vehicles in a...

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