economics problems Essay

Suppose a frost destroys much of the Florida orange corp. At the same time, suppose consumer tastes shift toward orange juice. What would we expect to happen to the equilibrium price and quantity in the market for orange juice?

The aspirin example shows what happens to the demand for good B when the price of good A increases. Manufacturer A's price having increased, demand for its aspirin product (for which there are many substitute goods) decreases.

1) How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand to verify your answers.

managers, a new transfer price was determined that calìs for the stores and Wall Décor to split the profits on unframed prints 30/70 (30o/o to the store, 70o/o lo Wall Décor) and the profits on framed prints 50/50. The following additional terms were also agreed to: . "Profits" are defined as the store selling price less the ABC cost. . Stores do not share the profits from related products with Wall Décor. . Wall Décor will not seek to sell unframed and framed print items through anyone other than Greetings. . Wall Décor will work to decrease costs. . Greetings stores will not seek suppliers of prints other than Wall Décor. . Stores will keep the selling price of framed prints as it was before the change in transfer price. On average, stores will decrease the selling price of unframed prints to $20, with an expected increase in volume to 100,000 prints. Analyze how Wall Décor and the stores benefited from this new agreement. In your analysis, first (a) compute the profits of the stores and Wall Décor using traditional amounts related to pricing, cost,

If the school allowed another student the right to sell ice cream on campus in addition to the stand known as Ice-Campusades, the price of ice cream would likely fall as a result. In terms of the supply and demand graphs, the supply of ice cream would increase and therefore cause a shift to the right. Meanwhile, the demand for ice cream would remain unchanged because the number of students attending the school stays the same. The previous equilibrium price was $1.50, however, the new equilibrium price would be lower because the intersection of the supply and demand curves would be further down along the demand curve. This phenomenon makes sense logically as well because if one seller reduced his selling price, the other seller would have to

Question Coke and Pepsi are substitutes if Answer the supply of Coke increases when the price of Pepsi falls the demand for Coke increases when the price of Pepsi rises the demand for Coke increases when the price of Pepsi falls the demand for Coke and Pepsi rise and fall together Add Question Here

In reducing the quantity of pseudoephedrine coming into New Zealand, Customs and the Police are reducing the potential production of P. in effect, officials are increasing the scarcity of P in NZ, although this may seem positive, it may encourage producers of P to increase quantity supplied. This is because the recently increased scarcity causes producers to reduce supply, causing a leftwards shift of the supply curve, hence the equilibrium price increases (as shown on diagram 1). This is due to the inelastic nature of price for demand of P, as well as the elastic nature of price for supply of P. It is this price elasticity for supply of P that results in the producers of P increasing quantity supplied by a greater proportion than the change in price. The perverse incentive for producers of P in this case would be increased equilibrium price, which, according to the law of supply and the supply price elasticity associated with P, would cause producers to increase supply.

quantity supplied falls” (McConnell, Brue & Flynn, 2009, p. 51). Suppose One shot energy is doing very well, getting good reviews from health professionals, dieticians, and fitness specialists. Consumers will be willing to pay more and price will increase. Thus, creating anew equilibriumg with a higher price. Demand increases but supply curve does not change. With consumers willing to pay more for the effectivity of One shot energy drink, X energy company is motivated to supply more of its product at a higher price. Equilibrium then is reached when consumer demand peaks and supplying more product would not be profitable.

The company is facing stiff competition and the management of the department is forced to rethink its pricing strategy for Item345. The sales director proposed that if the department decides to reduce the price of Item345 to 15 French francs, the company would be

1. Explain what happens to price and quantity of milk when the following events occur:

The equilibrium price increases from P0 to P1 under a cartel. A higher diamond price was what the diamond suppliers were aiming for though the use of a cartel. The quantity demanded also decreased from Q0 to Q1 because some consumers could no longer afford the diamonds at the higher price. This indicates that the price of diamonds is set too high than where it should be.

Then the market demand equation for the fruit sellers will be: D = D1 + D2 + D3 = 60

Supply and demand is a model for understanding the determination of the price of quantity of a good sold on the market. The explanation works by looking at two different groups – buyers and sellers – and asking how they interrelate. The supply and demand model relies on a high level of competition, meaning that bidding can only take place if there is a high amount of buyers and sellers in the market. Buyers bid against each other and thus raise the price, while sellers bid against each other and thus lower the price. The equilibrium is a point at which all the bidding has been done; nobody has a reason to offer higher prices or accept lower prices. In this essay I will be critically analysing the supply/demand model in understanding actual world supply, demand and market behaviour. I will highlight this through the aid of diagrams and examples.

If we draw a Demand-Supply curve, the point where the demand curve and the supply curve meet is the market equilibrium which is the price at which quantity supplied equals quantity demanded. In this question, the equilibrium price is $20 and equilibrium quantity is 3, here at equilibrium price, the number of sellers and number of buyers are same which is 3, so there is no pressure for price to change. But if it is $24, the quantity demanded is less than the quantity supplied so there will be excess supply exerts downward pressure on price and if it is $16, the quantity demanded is greater than the quantity supplied so there will be excess demand exerts upwards pressure on price. Even if the sellers try to sell the widgets at price other than equilibrium prices the excess supply or excess demand will make the price same as the equilibrium price but we can change the market equilibrium by changing the supply and the demand, there are four case for it

Refer to Figure 16-3. Assume there are two types of firms in this region - beekeepers that produce honey and orchard keepers that produce peaches. The bees provide a benefit to the orchard keepers by pollinating their peach trees. In the absence of any government intervention, the equilibrium price and quantity in the honey market are