Markets: Demand & Supply Problems Dr. Dennis Foster

#0. In the market for oranges, what will happen if there is great weather in Florida and California? Supply Demand Price Quantity Pe Qe

Supply increases; price falls; output rises #0. In the market for oranges, what will happen if there is great weather in Florida and California? Supply increases; price falls; output rises Supply Demand Price Quantity Pe Qe New Supply New Price New Quantity

#1. In the market for fine dining, what will happen if incomes across the population rise? Supply Demand Price Quantity Pe Qe

Demand increases; price rises; output rises #1. In the market for fine dining, what will happen if incomes across the population rise? Demand increases; price rises; output rises Supply Demand Price Quantity Pe Qe New Price New Demand New Quantity

#2. In the market for beef, what will happen if the price of pork rises and the government restricts the import of beef? Supply Demand Price Quantity Pe Qe

Demand increases & Supply decreases; price rises; output ??? #2. In the market for beef, what will happen if the price of pork rises and the government restricts the import of beef? New Supply ??? Demand increases & Supply decreases; price rises; output ??? Supply Demand Price Quantity Pe Qe New Price New Demand ??? New Q ?? New Q ??

#3. In the market for apartments, what will happen if NAU’s enrollment increases 25%? Supply Demand Price Quantity Pe Qe

Demand increases; price rises; output rises #3. In the market for apartments, what will happen if NAU’s enrollment increases 25%? Demand increases; price rises; output rises Supply Demand Price Quantity Pe Qe New Price New Demand New Quantity

#4. In #3 (market for apartments), what will happen if NAU students successfully lobby the city council to establish a “rent ceiling” at Pe? Supply Demand Price Quantity Pe Qe New Price New Demand New Quantity

#4. In #3 (market for apartments), what will happen if NAU students successfully lobby the city council to establish a “rent ceiling” at Pe? Price Off Mkt Price Supply Fixed Price New Demand Old Demand Quantity Available Quantity DesiredQuantity

What is the “problem” in this market? There is shortage of apartments . . . at the controlled price! There are fewer apartments available than would be true if the rents were not controlled. Losers – landlords, students that can’t find apartments, students that can find apartments but must “pay” higher costs. Winners – the whiners. How can tenants “pay” more in this market? Under the table payments. Sub-leasing. Special deposits (perhaps non-refundable). Reduced quality. “Unfair” discrimination. Parking, and other, fees.

#5. In the market for new cars, what will happen if gas prices jump by 25% and auto workers go on strike? Supply Demand Price Quantity Pe Qe

Demand decreases & Supply decreases; output falls; price ??? #5. In the market for new cars, what will happen if gas prices jump by 25% and auto workers go on strike? New Supply ??? Demand decreases & Supply decreases; output falls; price ??? Price Supply New Price ?? Pe New Price ?? Demand New Demand ??? Quantity Qe New Q

#6. In the market for the Xbox, what will happen if the price of Sony Playstations fall as does the price of games that are played on the Xbox? Supply Demand Price Quantity Pe Qe

Demand increases & decreases; output ???; price ??? #6. In the market for the Xbox, what will happen if the price of Sony Playstations fall as does the price of games that are played on the Xbox? Demand increases & decreases; output ???; price ??? Supply Demand Price Quantity Pe Qe New Price ?? New Price ?? New Demand ??? New Demand ??? New Q ?? New Q ??

Markets: Demand & Supply Problems Dr. Dennis Foster