📚 Learning Guide
Government Subsidies and Market Effects
medium

If the government increases subsidies for electric vehicles, what is the likely underlying cause of the subsequent rise in sales for home charging stations?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Increased affordability of electric vehicles leading to more consumers buying them

B

A sudden increase in gas prices pushing consumers towards electric options

C

A marketing campaign promoting electric vehicles

D

A shortage of electric vehicles in the market

Understanding the Answer

Let's break down why this is correct

Answer

When the government increases subsidies for electric vehicles (EVs), it makes buying these cars cheaper for consumers. As more people decide to purchase EVs because of the financial help, they will also need a way to charge them at home. This leads to a higher demand for home charging stations, which are necessary for convenient charging. For example, if a family buys an electric car because they received a subsidy, they will likely want to install a charging station in their garage or driveway to make it easy to power their vehicle. Overall, the rise in electric vehicle sales directly drives up the need for charging infrastructure at home.

Detailed Explanation

When the government gives money to help people buy electric cars, these cars become cheaper. Other options are incorrect because Some might think that high gas prices alone make people switch to electric cars; A marketing campaign might make electric cars popular, but it doesn't change their price.

Key Concepts

Government Subsidies
Market Dynamics
Consumer Behavior
Topic

Government Subsidies and Market Effects

Difficulty

medium level question

Cognitive Level

understand

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.