Again consider the market for automobiles.The government has recently increased the fuel efficiency standards for domestically sold cars (the average mileage per gallon must get better).These regulations will make it more expensive to produce a car, but also make cars go further on a gallon of gas.

a.Draw the initial equilibrium.

b.What is the effect on the demand for automobiles?

c.What is the effect on the supply of automobiles?

d.What is the effect on the equilibrium price and quantity?Please explain briefly.