Answered: The Cherry Blossom Festival is coming…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The Cherry Blossom Festival is coming to Georgia. How will it affect the demand for pink ribbons and shirts(Cherry Blossom Festival Merchandise)?Draw a diagram to illustrate your answer?

Expert Solution

Step 1 Determinants of demand

In economics, we know that there are various determinants of demand. Amongst them, the most pervasive is the own price of the good, but there are other determinants that affect the demand of a commodity, such as the price of substitute/complementary goods, population, income, taste and reference etc.

Dx = f(Px, Pr, Y, N, T)

where Dx is the demand for a good

f is the 'function of'

Px is the own price of the good

Pr is price of related goods

Y is the income

N is the population

T is the taste and preference

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