Problem
During 2021, people's incomes grew rapidly. New cars are a normal good. Also in 2021, there were supply chain interruptions that drastically raised the price of the computer ships used to produce new cars. You will be asked several questions about this situation. Do NOT draw a graph; instead please respond to the questions in an essay form. Explain how the market (that is, the demand and supply) for cars was affected in 2021. Explain the effect on the equilibrium price and quantity of cars. Suppose that there had been no supply chain interruptions. Explain what then would have been the effect on the equilibrium price, the equilibrium quantity, and the efficient quantity of cars.