Assume that a scientific study came out confirming that consuming one teaspoon of Nutella a day decreases the rate of heart diseases. As a result, Nutella becomes more popular to consumers. In addition, news reports state that there has been a technological improvement in the production o hazelnuts leading to a decrease in the price of hazelnuts. What is likely to happen in the market of Nutella?
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- Ma1. suppose that the US consumers buy 5 million 16-20 lb units at $29 per unit of turkey in October and 45 million units in November at $60 per unit. Which determinant has possibly created this change in the market of whole turkey?Suppose you observed that the consumption of organges increased sharply last year, however thet total consumer expenditure on oranges did not change. Did a supply shift, demand shift or both cause this? explain using graphsSuppose the Mayo publishes a study finding that the caffeine in coffee increases the probability of getting Alzheimer’s. How do you imagine this will affect the market for coffee? Which determinant of demand or supply is being affected? Show graphically with before and after curves on the same axes. How will this change affect the equilibrium price and quantity of coffee? Explain your reasoning.
- 11) Assume Gloria is initially in equilibrium and that X and Y are normal goods for her. Then the price of X falls. For Gloria to move to a new equilibrium point her consumption ofA) X must decrease.B) X must remain constant, but her consumption of Y must decrease.C) X must increase.D) both X and Y must decrease.Exercise 1: Shifts in the Demand Curve. In recent years, sales of music CDs have decreased as many consumers have elected to download individual tracks of music directly into their playing devices. Of course, the cost to download a single track is less than the cost of a CD. The demand for music CDs is shown in the demand schedule as D1. Imagine that as a result of pressure from the music industry, music downloads are outlawed, and the only way to purchase music is to buy a music CD. Demand for CDs increases and is now shown in the demand schedule as D2. Using the data presented in the Demand Schedule for CDs, graph the demand curves D1 and D2 in the chart below. Refer to the chart you have drawn and answer the following questions: 1. When CDs sell for $18, compare the quantity demanded for CDs at demand levels D1 and D2. 2. Explain why more customers are now willing to purchase CDs for the same price. 3. When demand increases at all price levels, the demand curve shifts in which…How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch from pencils to pens in school. Moreover, the price of plastic, an important input in pen production, has dropped considerably. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Scenario 1DemandSupply012345678910109876543210PRICE (Dollars per pen)QUANTITY (Millions of pens)Demand Supply Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph. Scenario 2DemandSupply012345678910109876543210PRICE…
- Explain the concept of spatial equilibrium from the perspective of both consumers and firms. Please includegraphs13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch from pencils to pens in school. Moreover, the price of plastic, an important input in pen production, has dropped considerably. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.
- 1. Discuss the reasons managers should be knowledgeable with the concept of equilibrium price and equilibrium quantity of products and services.2. Explain the concept of equilibrium price and quantity and how it is attained. How easy is the re-attainment of equilibrium once we move away from it?3. Describe, by also using appropriate diagram(s), the following: a) A change in consumers' tastes and b) A change in the price of a good.4. Assume that the quantity supplied of wheat is less than its quantity demanded. Will a similar situation impact the market price for wheat? How can such a market condition be resolved?5. Identify substitute and complement products for an i-phone? Will an increase in price of an i-phone's substitute product impact the demand for i-phones?Critically evaluate: “In comparing the two equilibrium positions in Figure 3.7b, I note that a smaller amount is actually demanded at a lower price. This refutes the law of demand.”10) Suppose the price of X rises by 20 % on January 10, 2021 and that by March 10, 2021 the quantity of X demanded has fallen by 5 %. What must be true (ceteris paribus) about the quantity of X demanded as of December 10, 2021? a) it must be no greater than it was on March 10 b) it must be at least 20% above what it was on January 10 c) it must be greater than it was on March 10 d) it cannot be determined with the given information