Assignment 3-Supply and Demand Concepts

Assignment 3-Supply and Demand Concepts

As an economist for ABC Plastics, your boss   has asked you to respond to some questions she has regarding the company’s   main product, tablet cases. A marketing research firm recently developed the   following supply and demand schedules for tablet cases:

You are to develop a report addressing the   following questions and present your findings to the Board of Directors:

Questions:

1. Construct a graph   showing supply and demand in the tablet case market, using Microsoft   Excel. 

2. How are the laws of supply   and demand illustrated in this graph? Explain your answers. 

3. What is the   equilibrium price and quantity in this market? 

4. Assume that the   government imposes a price floor of $16 in the tablet case market. What would   happen in this market? 

5. Assume that the   price floor is removed and a price ceiling is imposed at $8. What would   happen in this market? 

6. Now assume that the   price of tablet cases drops by 50%. How would this change impact the demand   for tablet cases? Explain your answer and reconstruct the graph developed in   question one to show this change. 

7. Assume that incomes   of the consumers in this market increase. What would happen in this market?   Explain your answer and reconstruct the graph developed in question one to   show this change. 

8. Assume that the   number of sellers decreases in this market. What would happen in this market?   Explain your answer and reconstruct the graph developed in question one to   show this change.

9. Explain the   difference between a normal good and an inferior good. Would your answers to   question #7 change, depending on whether this good is a normal or inferior   good? Why or why not?

Present your analysis in Microsoft Excel   format. Enter non-numerical responses in the same worksheet using textboxes.