	According to Brown’s List of questions and answers, GM, Daimler-Chrysler and BMW have banded together in order to produce new hybrids vehicles. Also, according to the article regarding the Toyota Camry, Mitsubishi is also planning on producing a hybrid vehicle. Figure 3 addresses the effect that increasing the number of firms will have on the market. With the price already higher than the market will clear, an added firm will theoretically increase the supply curve, while decreasing the equilibrium price. In this current market, it seems that new firms will simply add a surplus (as designated on the graph by the two points on the price line that are greater than the theoretical quantity demanded at equilibrium). This is especially true for those buyers that may not consider brand names when buying cars, thus treating all choices as substitutes.
	As with most technological products, prices decrease as technology can be used more efficiently in production. The $3,000 premium is expected to drop by half in the next decade, according to Brown’s article. Figure 4 will show, in the red lines, the potential future market. The price will drop to P. This will, as can be viewed on the chart, increase the quantity demanded. Since the price will not be competitive with traditional vehicles, it will still not reach the market clearing price.
	There are more factors at play that may increase market interest in hybrids. Most notably and recent to come to press are the new Plug-In Hybrids. According to an article by Marianne Lavelle, in US News and World Report, some of these new vehicles can get up to 100 miles per gallon of gasoline. This is because the vehicles can run for 40 miles on a full charge without using a drop of gas. If the increased gas prices become an even more prominent issue, this option will become much more viable.
	It is my opinion, in light of this analysis, that the long run market for hybrids will eventually reach equilibrium. It is well understood that highly technological devices take time to reduce in price enough to be considered affordable by the general public. With manufacturers making hybrid trucks, cars and SUVs, most buyers will likely choose a hybrid if the sticker price becomes more comparable to that of traditional vehicle.
