Mastered Report

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Abigail Rivas Product Report Template 1. Choose a Product and a Trend Before you begin, choose a product to study. Specifically, make sure to choose a product that is a consumer good. Keep in mind that goods are tangible products. For example, soft drinks, clothing, cars, and electronics are all types of consumer goods. Coffee For the product you’ve chosen, consider economic trends (real or hypothetical) that might impact this product. You should come up with at least two: one for supply and one for demand. Some examples that you may use:  A change in preferences due to a fashion or health trend  A shift in demographics due to aging populations  An increase or decrease in the input costs (such as cost of raw materials or labor) needed to offer a product Note: Although research is not required for this step, it is encouraged. See the Supporting Materials section of this project for some recommended databases. Supply Trend: Protests and boycotts Demand Trend: Coffee Increases Please note that, while this section is not checked for mastery, it is needed as the basis for the rest of your project. 2. Determinants of Supply and Demand For each economic trend you consider, describe it according to the determinants of supply and demand. Use the determinants from the following list:  Demand: Income, prices of related products, preferences, demographic characteristics, buyer expectations  Supply: Prices of factors of production, technology, returns from alternative activities, the number of sellers, seller expectations, natural events

Demand Determinants: Inflation has increased. Protests increasing. Discontent increasing. Prices increases. Shortage in labor. 3. Model a Shift Using one of the trends that you’ve described above, model the shift in supply or demand for this product. Make sure to use appropriate labels and terminology in your model. Note: To model the shift in supply or demand graphically, you may use the drawing tools in Microsoft Word, or use the graphing tool linked in the Deliverables section and take a screenshot. Alternatively, you may describe the shifts that will occur.

4. Rationale Explain your rationale for this shift (based on the model above) using appropriate economics terminology. As you work, consider the following:  The difference between a shift in supply or demand versus a shift in the quantity supplied or demanded  How the equilibrium will shift Demand is increases. The difference between a shift in supply or demand vs a shift in the quantity supplied or demanded is that shift in supply. The D2 line is when demand shifts then the demand curve does too. If it cannot continue to supply goods at the same price it did due to protests and supply chain issues, it changes the quantity supplied. When the price changes, it shifts the quantity demanded. The higher equilibrium if demand was low. The equilibrium will shift when the demand curve changes and/or Equilibrium Supply Demand Increase

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the supply curve shifts. 5. Elasticity The firm is also interested in understanding the elasticity of price for this product within the market. Consider a rise in the price of this product and determine if demand is elastic or inelastic based on an application of the determinants of price elasticity of demand. For each of the determinants in the following list, consider the impact on the elasticity of demand for the product:  Availability of substitutes  Time  Importance in household budgets  Luxury or necessity (such as addictions or habits) When factoring a possible price increase, the demand is elastic. Coffee is a luxury. The more time passes, consumers will have time to find other alternatives. 6. Price Increase The firm is considering how the price of this product might change its demand. Using your determination on elasticity, explain how a price increase would impact revenue for this product. Price increases mean revenue decreases. It is more price elastic when it comes to bottom lines. 7. Externalities In addition to the trends and shifts, the company is also interested in understanding possible ramifications of this product on the larger world. Discuss a potential externality of a transaction for this product. It may be positive or negative. For example:  Pollution from secondhand smoke or product waste  Education as a result of product use  Bacterial resistance due to overuse of antibiotics  Widespread disease prevention due to vaccinations

Widespread consumption and decrease in demand for goods due to protests and discontent. Citations Marginal Revolution University. (2015). An Introduction to Externalities. https://my-ibisworld-com.ezproxy.snhu.edu/us/en/industry/33521/products- and-markets#supply-chain

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