W2: Characteristics of Supply and Demand - Click here to submit Deadline Due by
ID: 1161872 • Letter: W
Question
W2: Characteristics of Supply and Demand - Click here to submit
Deadline
Due by the end of Week 2 at 11:59 pm, ET.
Directions
Write an essay answering the questions below using complete sentences. Follow proper APA guidelines and reference the source. Upload and submit your document.
Explain the law of supply, and why the supply curve slopes upward? How is the market supply curve derived from the supply curves of individual producers?
Identify what are the major determinants of price elasticity of demand? Use those determinants and your own reasoning in judging whether demand for each of the following products is probably elastic or inelastic: (a) bottled water; (b) toothpaste; (c) Crest toothpaste; (d) ketchup; (e) diamond bracelets; and (f) Microsoft's Windows operating system.
Use the distinction between the characteristics of private and public goods to determine whether the following should be produced through the market system or by government: (a) French fries; (b) airport screening; (c) court systems; (d) mail delivery; and (e) medical care. State why you answered as you did in each case.
Explanation / Answer
The law of supply states as prices increases, the quantity supplied will also increase and that is the reason why the supply curve is upward sloping on a coordinate of prices and quantities.The market supply curve is derived from the individual supply curves by summing the quantity supplied by each individual producer at a constant price.
A. Bottled water is a necessity and necessities have inelastic demand as price change would not change the quantity by a large amount.
B. Toothpaste would have an elastic demand curve as it has substitutes so any price chnage might lead to loss or gain of consumers because of availability of other substitutes.
C. Crest toothpaste is a specific kind of toothpaste and hence will face an inelastic demand as it has unique set of customers
D Ketchup would ,as explained in part B, have elastic demand curve because of presence of substitutes
E Diamond bracelets are a luxury good and hence would have elastic demand curve
F. Microsoft Windows operating system would have a elastic demand curve because ofother substitutes such as Mac. Hence if prices of windows operating system change, quantity will also change significantly
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