Essay on Intermediate Price Theory

Meaning when a tax is placed on a certain item, whiskey, in this demand model the producer, the farmers, would pay most of the tax. At the time the federal government saw whiskey as a luxury and so placed the tax on the distillers, raising the price of production in return decreasing the amount produced. They saw they could pay off their debt, by taxing the whiskey, and the producers of whiskey would pay for the debt for them. Therefore, the National debt incurred during the Revolutionary war and, the supply and the demand of whiskey are related. It was shown that only the distillers who produced less would pay more because of the tradeoff of equity end efficiency, meaning that because of the debt from the war, the government needed a way to pay for the debt and taxed whiskey. Concluding that the supply and demand elasticities of whiskey are completely due to the taxation put on the whiskey to pay for the

Demand for a good/product as Sherman et al. (2008) note "is the quantity of that good buyers would be willing and able to purchase during a given period, at various price levels"¦" Currently, the entity has "a 48.3 percent share of U.S. beer sales to retailers" (Anheuser Busch 2011). In this case, using the percentage of beer sales the firm makes to retailers as an indicator of demand, one can easily conclude that the demand for Anheuser Busch's products is quite high. The high demand in this case can be attributed to aggressive marketing and advertising as well as a recovering economy.

“The beer industry in the United States generates $75 Billion in annual sales.” (Abelli, 4)

governments took from the loss of alcohol taxes. Even the federal government lost a sizable

Per capita beer consumption in the country had been stable for many years. In order to find new opportunities

According to the law of demand, if a.product price increases, quantity demanded will decrease.b.consumer income increases, quantity demanded will increase.c.product price increases, quantity demanded will increase.d.consumer income increases, quantity demanded will decrease.e.supply increases, demand will increase. ANS

In this task I am going to explain demand and supply in details. Demand is how much people wants from a certain product. While supply is how much of something people have. Demand and supply involve in everything in our life, for example if human being feels that they need a certain product they will start to produce it to meet their demand. Demand and supply curves always have an inverse relation which means if the demand increase the supple will decrease and vice versa.

This Craft Beer segment has tripled from the 1% share of about 20 years ago.

a) The consumers’ tastes were changing. According to the case, the beer consumption had declined by 2.3% due to the competition from wine and spirits-based drinks. What’s more, an increase in federal tax as well as health concerns also caused the decline of the sales of beer.

The perception seems to be that Americans are being more frugal because of the economy and saving more as a precaution. Competition has made the price of beer to a consumer rather negligible; Anheuser-Busch and MillerCoors have the ability to raise the price of beer because of their large followings. Another factor that could affect the price of beer is global warming, which you will read about later.

In addition to the law of demand, the law of supply also serves as the second major resource in studying economics. The law of supply states that with other factors remaining constant, as the price rises, the quantity of the product supplied also rises. Conversely, as the price falls, quantity of the product supplied also falls (Colander, 2006, p 97). The law of supply is refers to how producers can effectively substitute the production of one product for another (Colander, 2006, p.

Finally, the large brewers were increasingly successful by creating another point of differentiation. They attracted more consumers as the big brewers had the capacity to package beers in different sizes and therefore also appeal to consumers who drank beer in small amounts or slowly as well as packaged in different numbers to cater to the growing population of drinkers who consumed at home.

Changes to indirect taxes in particular can have an effect on the pattern of demand for goods and services. For example, the rising value of duty on cigarettes and alcohol is designed to cause a substitution effect among consumers and thereby reduce the demand for what are perceived as “de-merit goods”. In contrast, a government financial subsidy to producers has the effect of reducing their costs of production, lowering the market price and encouraging an expansion of demand.

Beer Company 2 is a brewer of “seasonal and year-round beers with smaller production volume and higher prices” that “outsources most of its brewing activity” (pg. 120). It is financially conservative, and has undergone a “major cost-savings initiative to counterbalance the recent surge in packaging and freight costs” (pg. 120).

A, B and C are points on the supply curve. Each point on the curve reflects a direct correlation between quantity supplied (Q) and price (P). At point B, the quantity supplied will be Q2 and the price will be P2, and so on. (To learn how economic factors are used in currency trading, read Forex Walkthrough: Economics.)