Question

Which of the following government actions would increase the supply of cars in the United States?

Answer 1

The removal of car mileage regulations- this government actions would increase the supply of cars in the United States.

Option: C

Explanation:

To increase supply of any product in the market government needs to take some steps which is in favor of producers. Suppose if government applies more tariff and internal taxes on the production it will decrease the supply rate of that particular product.

Like here if U.S government remove the car mileage regulations from car producing companies then the supply of the car will increase. When government restrict the mileage per kilometer for the cars then it remain same for all company's car that affect their business. If there is no such bondage then they will increase the mileage and will capture the market.