Supply and Demand and Price

A price ceiling set below the equilibrium price means that the quantity supplied ____ the quantity demanded so that a ____ exists.

Sport utility vehicles increase in popularity, thus increasing the demand for the workers who make them.

c. Suppose the market price is $5. What problem would exist in the market? Does it lead to surplus or shortage? How do you expect this problem will affect the price? Indicate this on the supply and demand graphs.

(2) You and I are in consumer equilibrium. CDs cost 10 dollars each and cassette tapes only

| An oligopolist that faces a kinked demand curve is charging price P = 6. Demand for an increase in price is Q = 280  40P and demand for a decrease in price is Q = 100  10P. Over what range of marginal cost would the optimal price remain unchanged?Answer

Disregard the new tax from number three. Now assume the government imposes a price ceiling of $100 in this market, as the result of protest of price gouging by sellers. What would happen to the price and quantity in this market?

We use multiple products on a daily basis, from toothpaste to ink pens. Though we may use these items for mere moments, there is a different supply and demand cycle for them. Every product has a different supply and demand cycle, and this cycle varies throughout time. Some items may constantly be in demand, like cotton, and others may be in demand seasonally, like eggnog. These shifts in supply and demand may influence the price of certain products, how much of the product is available at any given time, etc. Commodities available during only peak times throughout the year may even be substituted with a similar item. These seasonal items are considered

III-2 18) In what ways can economists help auto manufacturers estimate the marginal rate of substitution between features such as vehicle interior size and acceleration?

In figure 3.4, what are the implications if the price of this product is $8?

A sudden increase or decrease in the supply of a particular good is also known as a supply shock. A supply shock is an event that suddenly changes the price of a product or service. This sudden change affects the equilibrium price. The two types of supply shocks that exist are the Negative Supply shock and the Positive Supply shock. A negative supply shock, which is a sudden supply decrease, will raise the prices and shift the aggregate supply curve to the left. A negative supply shock can cause stagflation due to the combination of raising prices and the falling output. Meanwhile a positive supply shock, an increase in supply, will lower the price of a good and shift the aggregate supply curve to the right. A positive supply shock could be advancement in technology which most certainly makes production more efficient which thus increases output. For example a positive supply shock could be shown in the early 1990s when communication and information technology exploded which resulted directly in productivity increase, and an example of a negative supply shock would be that of the high oil prices associated with Arab oil embargo of the early 70s is the classic example of this occurrence. Any other factor could also produce this effect. Such as if

Feedback: The improved technology will increase the supply of the product, thereby lowering the equilibrium price and increasing the quantity demanded.

Group members Nguyen Dat Anh Ho Ngoc Son Nguyen Thai Ha Nguyen Thi Huyen Trang Luyen Trung Kien

b. If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or 5 years from now ? 5 years from now because people cannot easily decrease their consumption of cigarettes. Therefore they have to decrease smoking gradually until they stop smoking.

In economics supply and demand refers to the relationship between the accessibility of a good or service and the need or wish for it amid buyers (Microsoft, 2009). Our daily lives are affected by supply and demand. Demand is based on the price of a product, the price of related products, and customer’s salary and preference. Supply can rest not only on the price available for the product but also on the cost of similar products, the method of how it is made, and the availability and price of contributions. In this specific case I will explain how supply and demand has affected my decision to purchase a home (The Free Dictionary, n.d.).

This article is about the elevate in gasoline in wakes of Hurricanes Harvey and Irma. Given the way winds and floods shut down oil rigs, batter refineries and disrupt pipelines, there was minute chance that Florida’s energy infrastructure would elude the wrath of these natural disasters. Are these elevates in price just the beginning of a rise in gasoline prices until repairs are consummated or a replication to price gouging? For some economics this remains to be unseen. The laws of supply and demand have yet to assert themselves in the hardest hit areas of Florida and Texas.