ECON312 Demand Supply and Market Equilibrium

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ECON312 Demand Supply and Market Equilibrium
Think about a product that you have purchased recently (e.g. soda, diapers, takeout meals…

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ECON312 Demand Supply and Market Equilibrium

ECON312 Demand Supply and Market Equilibrium

Discussions Week 2 All Students Posts – 47 Pages 

Think about a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc.). Explain how the law of demand affected your purchase. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of these determinants change? Give examples of scenarios that would cause a change in demand versus a movement along the same demand curve and supply curve for this product. Discuss the new equilibrium price and quantity that result from these changes. Can you demonstrate some of these changes graphically?

All department stores have periodic sale days during which prices are reduced substantially. The purpose of this price reduction is to get rid of old merchandise and stimulate the buying by customers (who may purchase many other items as well). Thus, stores take advantage of the law of demand: merchandise which would otherwise be hard to sell, is sold because customers are willing to pay a lower price. When a housewife goes to the supermarket to buy groceries and finds that one of the products she intended to buy, was reduced in price because of a special sale, it makes her feel wealthier. Indeed, she can buy more with the money she started with. This is the income effect…