Predict the impact on each market. Use + and – to indicate whether there will be an increase or decrease in demand (D), supply (S), equilibrium price (P) and equilibrium quantity (Q). If there is no change, use N, and if the change cannot be predicted, use U for uncertain. Market Event D S P Q Canadian Early frost destroys a large percentage of the grape crop Wood-burning stoves The price of heating oil and natural gas triples Cell phones Technological advances reduce the costs of producing cell phones Gold Large gold deposits are discovered Fast foods The public show great concern over high sodium and cholesterol in fast foods; also, there is an increase in the minimum wage. Bicycles There is increasing concern by consumers about physical fitness; also, the price gasoline falls.
Predict the impact on each market. Use + and – to indicate whether there will be an increase or decrease in
|
Market |
Event |
D |
S |
P |
Q |
|
Canadian |
Early frost destroys a large percentage of the grape crop |
|
|
|
|
|
Wood-burning stoves |
The price of heating oil and natural gas triples |
|
|
|
|
|
Cell phones |
Technological advances reduce the costs of producing cell phones |
|
|
|
|
|
Gold |
Large gold deposits are discovered |
|
|
|
|
|
Fast foods |
The public show great concern over high sodium and cholesterol in fast foods; also, there is an increase in the minimum wage. |
|
|
|
|
|
Bicycles |
There is increasing concern by consumers about physical fitness; also, the price gasoline falls. |
|
|
|
|
Market demand curve for a commodity shifts as a result of a change in consumers income, their tastes, the price of related goods and the number of consumers in the market.
The market supply curve of a commodity can shift as a result of a change in technology, government regulations, taxes and subsidies, input costs or with changes in weather conditions for agricultural products.
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