Supply and Demand – Nursing Experts Help

Assignment Overview

Before beginning this assignment, make sure you have gone
carefully through all of the required readings for this module.  It is
very important to carefully absorb the general concepts as well as the
numerical examples in the background readings.  For this assignment, you
will have to answer some purely conceptual questions, as well as some numerical
problems.  For conceptual questions, make sure to thoroughly explain your
answers and to cite specific readings from the required background materials to
explain your answers.  For numerical problems, make sure to show all of
your work and explain how you arrived at your answers (partial credit can be
given if you get the final answer wrong but do some of the steps correctly).

Case Assignment

Part A: Conceptual questions

1.   Suppose you own a pet shop.  Your sales are
decent but a marketing consultant tells you that you could increase your sales
and be able to charge a higher price if you spend some money on local
television ads.  If the consultant is right, will advertising lead to an
increase in quantity demanded?  Or a shift in the demand curve? 
Both?  Neither?  Explain your answer and make sure to cite at least
one of the required readings in your answer.

2.   You are the owner of a furniture factory. 
You normally produce 100 pieces of furniture a day because that is how much you
can produce given the amount of qualified workers in your town and the amount
of reasonably priced wood that you can purchase locally.  Then one day you
get an order from a large national retail chain who wants to purchase 200
pieces of furniture a day from you.  You are hesitant, as you will have to
pay higher wages to get some qualified workers to move to your town.  You
also will need to pay higher prices for wood because you will no longer be able
to rely solely on local suppliers and will have to spend more on shipping wood
from other towns.  But you drive a hard bargain and the retail chain
agrees to pay one and a half times your normal price.  Does this situation
describe a change in quantity supplied?  A shift in the supply
curve?  Both?  Neither? Explain your answer and make sure to cite at
least one of the required readings in your answer.

3.   Suppose marijuana has just been legalized in your
state.  Nobody in your home town wants to start a marijuana business, as
this would be too much of a stigma.  But being an MBA student, you know a
good business opportunity when you see one and decide to take a stab. 
Shortly after starting up your business, you gain a loyal following of
customers and start raking in some steep profits.  However, the local
government decides that they want a cut of your profits and starts charging a
20% sales tax on marijuana.  Do you think this would lead to a 20% or
greater loss in sales?  Do you think marijuana in this situation would be
facing inelastic or elastic demand?  Explain your reasoning, and make sure
to cite at least one of the required readings regarding elasticity.

Part B Quantitative Problem

Suppose the demand function for a new smartphone can be
expressed as QD =  1000 – 1.5P with QD being quantity demanded and P being
price.  The supply function can be expressed as QS = 50 + 2P

Fill out the following table using the above equations:

Price

Quantity Demanded

Quantity Supplied

Surplus Amount or Shortage Amount

200

 

 

 

220

 

 

 

240

 

 

 

260

 

 

 

280

 

 

 

300

 

 

 

320

 

 

 

340

 

 

 

Now answer the following questions:

1.   What is the equilibrium price?  You can
compute this either using Microsoft Excel, or by using algebra from the
equations above and solving for a price where quantity supplied equals quantity
demanded. Show your work by either showing the algebra steps or by showing how
you used Excel to calculate.

2.   Suppose the supply function changes to 100 +
2P.  What is the new equilibrium? Show your work by either showing the
algebra steps or by showing how you used Excel to calculate.

Assignment Expectations

·        Answer the
assignment questions directly.

·        Stay focused on the
precise assignment questions. Do not go off on tangents or devote a lot of
space to summarizing general background materials.

·        For computational
problems, make sure to show your work and explain your steps.

For short answer/short essay questions, make sure to reference
your sources of information with both a bibliography and in-text citations. See
the Student Guide to Writing a
High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource
is the “Writing Style Guide,” which is found under “My Resources” in the TLC
Portal.
 
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