BOTTLED WATER Problem #1

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Presentation transcript:

BOTTLED WATER Problem #1 Event: Coke & Pepsi exit bottled water industry Bottled Water TIN ↓ # Sellers ↓ Supply ↓ (shifts left) S2 Price S1 DECREASE IN SUPPLY Change in QUANTITY DEMANDED (decrease) Know This! P2 ----------- E2 -------------- $150 E1 ---------------- ------------- D1 Q2 20K Qty

Problem # 2 Sports Cars Event: Economy falls into a recession TIPSE ↓ Income ↓ Demand ↓ (shifts left) Sports Cars Price S1 D2 DECREASE IN Demand Change in QUANTITY Supplied (decrease) Know This! ------------------- $75,000 E1 ------------- P2 Q2 -------------- E2 ------------------ D1 2 mil. Qty

Sample Problem #3 Squaw Valley Event: Winter conditions best in years TIPSE ↓ Expectations ↑ Demand ↑ (shifts right) Lift Tickets Price S1 INCREASE IN DEMAND Change in QUANTITY SUPPLIED (Increase) Know This! P2 ------------------- E2 $52 -------------- E1 ------------------ ------------- D2 D1 Q2 15,000 Qty

Cell Phones Problem #4 Event: Semi Conductor prices fall TIN ↓ Input Prices ↓ Supply ↑ (shifts right) Cell Phones S1 Price S2 INCREASE IN SUPPLY Change in QUANTITY DEMANDED (increase) Know This! 150 ----------- E1 ------------- P2 Q2 E2 -------------- ---------------- D1 10M Qty