Question 1 - 5 Marks Questions - Chapter 1 Class 7 Economics - Introduction to Demand and Supply - Economics

Imagine that there is a new technology that makes it possible to produce solar panels more cheaply. How will this affect the market for solar panels?

Answer:

Answer by Student 

• The price of solar panels will decrease. This is because it will be cheaper for producers to make solar panels, so they will be able to sell them for less.
  
  
• The demand for solar panels will increase . This is because people will be more likely to buy solar panels if they are less expensive.
  
  
• The market for solar panels will grow. This is because more people will be able to afford to buy solar panels, and more businesses will be able to afford to install solar panels on their roofs.
  
  
• The environment will benefit. This is because more people will be able to use solar panels to generate electricity, which will reduce the need for fossil fuels.
  
  
• T he government may offer incentives for people to install solar panels . This is because the government wants to encourage people to use solar energy, which is a clean and renewable source of energy.

Detailed Answer by Teachoo

• The price of solar panels will decrease. This is because the new technology will make it cheaper to produce solar panels. The cost of the materials used to make solar panels will not change, but the cost of labor and other production costs will go down. This will allow producers to sell solar panels for less money.
  
  
• The demand for solar panels will increase . This is because people will be more likely to buy solar panels if they are less expensive. Solar panels are a good investment because they can save people money on their electricity bills. The lower the price of solar panels, the more people will be able to afford to buy them.
  
  
• The market for solar panels will grow . This is because more people will be able to afford to buy solar panels, and more businesses will be able to afford to install solar panels on their roofs. The growth of the solar panel market will create jobs and boost the economy.
  
  
• The environment will benefit . This is because more people will be able to use solar panels to generate electricity, which will reduce the need for fossil fuels. Fossil fuels are a major source of pollution, so using solar panels instead of fossil fuels will help to improve air quality and reduce greenhouse gas emissions.
  
  
• The government may offer incentives for people to install solar panels. This is because the government wants to encourage people to use solar energy, which is a clean and renewable source of energy. The government may offer tax breaks or rebates to people who install solar panels. These incentives will make solar panels even more affordable and will help to further grow the solar panel market.