Given the scenarios below, observe any changes (shifts) to SUPPLY and DEMAND or

Question

Given the scenarios below, observe any changes (shifts) to SUPPLY and DEMAND or movement in regards to PRINTED BOOKS. 1. (1 point) Year over year sales of digital eBooks have risen 80%. a. b. (I point) A report was published that there is evidence of causation that more books that are displayed in the home, the higher the household income. (1 point) The largest book manufacturer in the world burned down. (1 point) Book prices are slashed across the board-20%. c. d. 2. Wendy's is currently boasting that the $.50 Frosty will remain on the menu. a. (1 point) Why would Wendy's sell a very popular product for such a low price? 3. Last year, Cook County, Illinois decided to implement a 3% tax on sugary beverages. a. (I point) With supply and demand analysis, what shifted? i. (1 point) What happened to the quantity sold of soda?

Explanation / Answer

Question 1

(a) Year over years sales of digital eBooks have risen 80%.

eBooks acts as substitute of printed books. Increase in sales of digital eBooks implies that people are increasing their demand for digital eBooks and are substituting printed books with eBooks.

Thus,

It can be stated that demand for printed books is decreasing.

This will shift the demand curve for printed books to the left.

(b) A report was published that there is evidence of causation that more books that are displayed in the home, the higher the household income.

This evidence of causation that more books that are displayed in the home, the higher the household income will induce many people to create display of books at their house as such display will automatically state their status.

This will lead to increase in demand for printed books.

This will shift the demand curve for printed books to the right.

(c) The largest book manufacturer in the world burned down.

As largest book manufacturer in the world has burned down, production of printed books will decline drastically.

When production declines, supply also decreases.

So, supply of printed books will also decrease.

This will shift the supply curve of printed books to the left.

(d) Book prices are slashed across the board - 20%.

This reduction in price will make the printed books cheaper and thus make people buy more printed books.

Change in price impacts quantity demanded of a good. Rise in price leads to fall in quantity demanded while fall in price leads to rise in quantity demanded.

So, this reduction in the price of printed books will lead to rise in quantity demanded.

This will lead to downward movement along the demand curve.

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.