Automobiles And Its Impact On Today 's Modern World Essay

820 Words Mar 16th, 2016 4 Pages
In today’s modern world, automobiles are more important to our day to day lives than almost anything else. Cars and trucks get American citizens to and from work, kids to school, out on dates, and back home to the family. The market for automobiles today is bigger than ever before, but is also influenced by many factors.
The supply and demand for vehicles today depends on many factors. One of the factors that the auto market depends on is the financial market. If Americans are losing their jobs, it is highly unlikely that they will be out shopping for the latest BMW 7-series, or Ford F-150. They are much more likely to stick with their current vehicle, and not trade it in for the latest and greatest gadgets that come in the new model vehicles. As incomes rise, people increase their consumption of many goods and services, and as incomes fall, their consumption of these goods and services falls. For example, an increase in income is likely to raise the demand for gasoline, ski trips, new cars, and jewelry (Rittenberg & Tregarthen, n.d.). This can also hurt the supply side of the relationship as well. Not long ago, big auto companies needed a bail out because they were not producing enough profit to stay above water. When fewer people are purchasing vehicles, the auto industry is making less money, meaning they have tough choices to make. When the large auto manufacturers start losing profit, they either have to cut production, cut employees, or both. The…

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