Demand and Supply Analysis Date 1. Substitutes and complements Good Substitutes complements An airline ticket More cheaper airlines Onboard refreshments A mystery novel Required textbooks Marker pens A floppy disk Flash disk Floppy drives 2…
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b) The relationship between the quantity demanded and the price is of negative relationship while that between quantity supplied and price shows a positive relationship. Quantity demanded of a commodity according to the theoretical information is the quantity of a commodity that a buyer is willing and able to purchase at the prevailing market prices (McEachern, 2011). When prices go up few buyers will be willing to buy depending on the nature of the good. This shown by the negative gradient depicted by the demand function of -2, it means that for every 1 unit increase in price quantity demanded reduces by 2 units. Quantity supplied on the other hand is with reference to suppliers and producers. It is defined as the quantity of goods and services that a provider is willing and able to produce and supply at the prevailing market prices (McEachern, 2011). Suppliers are always willing to supply more when prices are high as opposed to when they go down. This is depicted by the positive gradient of the supply curve of +1. This means that if prices are increased by 1 unit, quantity supplied also increases by 1 unit. c) The slope of the demand function is -2; this means that an increase in price by 1 unit solicits a reduction in quantity demanded by 2 units. d) The slope of the supply function is of +1. This means that an increase in price by 1 unit solicits an increase in quantity supplied by the same unit. 12. ...
1. Among the ten countries, price elasticity of demand for food is high in Tanzania and it decreases sequentially with Tanzania having the highest price elasticity all the way to the US having the lowest elasticity. This is explained by the general principle that with general increase in income demand for food normally goes down while that of luxury and junky foods goes up (Tucker, 2008). Developing countries still have a population that is still of the need of basic needs like food, this explains the reason as to why developing countries like Tanzania have high price elasticity of demand. Both the quantity demanded and supplied of the commodities in Tanzania is composed of food and food products. The agricultural products also add to the supply of food into the economy (Tucker, 2008). Consumers in developing countries with relation to food are related to then food prices and their income. Rise in income in such countries leads to an increased consumption. Changes in prices also threaten the food consumption patterns in such countries. The only food consumption that is not threatened is that of basic staple foods. This implies that there is high purchase of foods and foodstuffs in Tanzania than the same is for the US. High purchases are realized in staple foods. On the contrary, consumption of high value foods like meat experiences high purchases in the US (McEachern, 2011). 2. Fig. 2: Tax effect on demand and Supply 3. 4. 5. 6. 7. 8. 9. 10. 11. Before taxation is imposed on the commodity, the equilibrium quantity is Qe while the equilibrium price is Pe. Tax has the tendency of normally increasing prices of commodities as well as
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This current research is being carried out to evaluate and present demand & supply changes in metal and automobile markets; impact on the markets for Mazda and Nissan following the implementation of new technology; likely consequences of non-adoption of new technologies in the automobile industry.
Dr. Mukund further elaborates that a change in the equilibrium of supply and demand of money often results to a drastic change in the balance between supply and demand of commodities. Within the same field of economics, the supplier and consumer are vital in the equilibrium of supply and demand of both money and commodities (Mahajan Mukund 23).
On the other hand, an increase in price of goods and services may lead to an increase in supply as the suppliers are willing to supply at higher prices to make substantial profits (Mankiw, 2011). The simulation will focus on micro and macro economics, shifts in supply and demand curves as well as their affect on equilibrium prices and quantity.
Ceterus paribus is an omnibus assumption and holds all other factors which might influence consumer's demand as constant for the purpose of analysis. These factors may include income of the consumer, tastes of the consumer, impact of fashion and style, peculiar consumer characteristics like miserliness, scarcity of good and other choice patterns in consumer behaviour.Under these assumptions the price and quantity demanded are shown as inversely related and the graphical representation of consumer data in this scenario results in a downward sloping demand curve.
Using real world example, professional sports players are paid much higher than farmers, factory workers, engineers, and teachers even though all of them are generally in competitive markets.
In order to assess this situation, this paper will
Microeconomics is the smaller scope of economics that deals with specific focus on decision making factors that entities consider at the individual or firm levels. Basic economic theories are developed at the microeconomic level, such as the theories of
Being a basic commodity, food has an inelastic demand. This implies that demand for food does not correspond to prices in the ordinary sense (Shaw 630). For instance, the prices of corn, wheat, soybeans rose by 4% within the last six months. However, demand for these
The event in Pakistan had a shift on its supply curve, but did not affect the demand curve. However, there also exist incidents where change on the demand curve does not affect the supply curve (Krugman,
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