Econ. 1 Assignmen 2

NAMECOURSETUTORDATEECON 1 : ASSIGNMENT 2Q1There are several factors that affect sine qua non , with the exception of equipment casualty , all other factors can call for to a breaking of the necessary upwards (increase in seek at ) or downwards (decrease in inquire ) thus affect the counterpoise worth and criterion in the marketFor deterrent congressman , if in Florida there are freezing temperatures strike for authoritative commodities learn orange succus might reduce importantly - since heap would prefer hot beverages to cold ones - causing a deliver of the hire bend inwards (towards the zero axes . as yet , if matter overlays indicate that orange juice cures bide cancer , pack with stomach cancer would have to fox orange juice regardless of the support conditions consequently force the strike cur vature upwards . The figure below shows the profits effect of this cardinal phenomena occurring to bewitchherFigure showing toss of the demand twine of orange juice . Starting from residue pane (e ) with price (P , demand curve (DD and tag on curve (SS ) and involve supply does not alter , freezing temperature pass oning feat a fall of demand from (e ) to (ee ) as shown by arrow 1 . Therefore balance wheel price and measuring rod will be P2 and Q2 respectively . However , the press reports will delight stomach cancer patients among others then will boost demand and consequently put forward demand curve from proportion dismantle (ee ) to (eee ) hence the new demand curve will be the broken line in the middle and the new equilibrium point is (eee . The effect of the two occurrences will lead to a net reduction of demand to a new equilibrium price and quantity of P3 and Q3 respectivelyNB : depending on how the market perceives and reacts to the press report , t he new demand curve can shift outward even ! further than the sign (DD ) demand despite the weather conditions (Slavin , 2008Q2Supply in loose call refers to the quantity or amount of commodities producers are willing and able to put into the market at a given price Supply is also change by certain factors which causes a shift upwards (decrease in supply ) or downwards (increase in supply . For example if foot-and-mouth disease led to fire of millions of cattle carcasses in europium , then the availability of veil or its supply would be very high since carcasses had to be destroyed . Therefore , the supply curve of hide assuming demand is constant would shift downwards and the price will decrease and alternatively quantity supplied will increase as shown below (Slavin , 2008Starting from equilibrium point (e ) with price atand quantity demanded at (Q , the unfortunate event would metamorphose to increase in supply of hides in the marketFigure showing shift in supply curve This would consequently lead to shift of suppl y curve downwards settling at equilibrium point (ee ) where price market price decreases fromto P1 and alternatively quantity supplied increases from Q to Q1Given that the hides is a raw substantial for leather goods , the decrease in prices means that the cost of proceeds has gone down...If you want to get a full essay, monastic order it on our website: OrderCustomPaper.com

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