Determine how each scenario will impact either supply or demand in the given mar

Question

Determine how each scenario will impact either supply or demand in the given market.

Scenario In the market for The price of goose feathers, an input for pillows, increases sharply. pillows Researchers develop a higher-yielding, insect-repellant strain of rice. rice During the Great Recession, the average income for an American worker fell sharply. During that time, families began preparing more of their own meals. meals from restaurants Spam unveils a new flavor, barbeque, which has students intrigued. The students transition from buying ham to Spam. Spam iDecide, a consulting firm, joins the market for accounting. accounting services

Explanation / Answer

a).

Consider the given problem here as the price of “goose feathers” increases being use in the production of pillows, => the supply of pillow will decrease as the cost of production increases, => given the demand the supply decreases implied the equilibrium price of pillow increases and the equilibrium quantity demanded decreases.

b).

As the new high yield rice develop, => that will reduce the production cost to make the rice, => the supply will shift right side, => given the demand the equilibrium price will decrease and the quantity demanded increases.

c).

During the great recession the average income for a worker fell sharply, => the demand for restaurant meal decreases, => the demand curve will shift left side given all the prices. So, here the equilibrium price and the quantity demanded both decreases.

d).

AS the students transition from buying ham to “spam”, => that will increase the demand for “spam”, => given the supply curve the demand will shift right side, => the equilibrium price as well the quantity demanded for “spam” both increases.

e).

Now, “iDecide” a consulting firm join the market for accounting for accounting service, => the supply of the accounting service provider increases, => given the demand curve the supply curve will shift right side, => the equilibrium price will decrease and the quantity demanded will increase.

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