Would a failure to recognize growth options tend to cause a firm’s actual capital budget to be above or below the optimal level? Would your answer be the same for abandonment, timing, and flexibility options? Explain

By 2020, automobile market analysts expect that the demand for electric autos will increase as buyers become more familiar with the technology. however, the costs of producing electric autos may increase because of higher costs for inputs (e. g., rare earth elements), or they may decrease as the manufacturers learn better assembly methods (i. e., learning by doing). what is the expected impact of these changes on the equilibrium price and quantity for electric autos?