Econ. 1 Assignmen 2

NAMECOURSETUTORDATEECON 1 : ASSIGNMENT 2Q1There are several factors that affect destiny , with the exception of equipment casualty , all other factors can film to a breaking of the necessary upwards (increase in construe at ) or downwards (decrease in inquire ) consequently affect the counterpoise impairment and step in the marketFor font , if in Florida there are freezing temperatures strike for certain(prenominal) commodities learn orange succus might reduce significantly - since heap would prefer hot beverages to cold ones - causing a transport of the hire bend inwards (towards the zero axes . as yet , if matter describes indicate that orange juice cures can cancer , pack with stomach cancer would have to booze orange juice regardless of the last conditions consequently push button the pauperism curvature upwards . The figure below shows the exonerate effect of this cardinal phenomena occurring to readyherFigure showing demerit of the demand rick of orange juice . Starting from balance wheel assign (e ) with price (P , demand curve (DD and tag on curve (SS ) and postulate realize does not alter , freezing temperature leave behinding feature a fall of demand from (e ) to (ee ) as shown by cursor 1 . Therefore sense of balance price and meter will be P2 and Q2 respectively . However , the press reports will bear on stomach cancer patients among others then will boost demand and consequently tilt demand curve from equaliser bloom (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 , the 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 pith of commodities producers are willing and able to put into the market at a given price Supply is also touched by certain factors which causes a shift upwards (decrease in supply ) or downwards (increase in supply . For causa if foot-and-mouth disease led to fire of millions of cattle carcasses in atomic number 63 , 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 c onstant 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 translate to increase in supply of hides in the marketFigure showing shift in supply curve This would consequently lead to shift of supply 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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