The Economic Principle Applied to the Demand for Hybrid Cars
The article "Make Vroom For the Hybrids," from Time magazine's May 24, 2004 issue, looks at the new demand for hybrid, fuel-efficient, and clean-diesel cars. The article compares the new electric cars to the common gas-eating car. The key elements of discussion in the article are the new demand and advantages of buying a hybrid car, the competition between automakers to produce hybrid cars, and how the automakers will predict what types of cars consumers are going to want to buy in the future.
The main idea the article examines is the advantage hybrid cars have over normal cars that make them more attractive to consumers. The main advantage of buying a hybrid car is the fact that the cars are fuel-efficient. Even though they are priced about 500 higher than the normal car, the idea is that the consumer will make up for the price by spending much less on gas. Other aspects that appeal to the consumer include 500 tax deductions, the trendyness of new technology, and the idea that the consumer is helping the environment. The few disadvantages include high cost of repair, higher price, and training mechanics on the new complex engines, etc.
The other ideas the article examines are the competition between automakers and how the automakers will decide how, how many, and whether or not to produce these cars. Automakers are competing so strongly that companies such as Ford are even producing hybrid SUVs, which in non-hybrid form are infamous for requiring large amounts of gas. The demand for regular SUVs goes down whenever fuel prices go up.
In hybrid form, the consumer will not have to worry about high fuel prices, thus the consumer will be more likely to buy.
The economic principle applicable to the article is consumer sovereignty. The wants of consumers determine what the producers (in this case, automakers)...