Predict what will happen in the hot dog (franks) market if the Heinz Petition succeeds in persuading bakeries to package hot dog buns in packages of 10 (instead of 8) while at the same time hog farms increase their breeding efforts. First, assume Hot dog franks and buns are complements. The Heinz Petition is likely to affect demand for hot dog franks since it will no longer be necessary to buy 2 packages of buns for one pack of hot dogs. Will this increase or decrease demand? (please answer) Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it. Did price increase of decrease? (please answer) Did quantity increase or decrease? (please answer) Second, “….while at the same time hog farms increase their breeding efforts.” Is this a demand or supply issue? (please answer) Will this increase or decrease it? (please answer) Please draw a graph to show the change and the effects on the new equilibrium. Be sure to label it. Did price increase of decrease? (please answer) Did quantity increase or decrease? (please answer) When you look at both sets of graphs you drew, what happened to price in each case? (please answer) What happened to quantity in each case? (please answer) Overall, which can we say (price or quantity) will increase with certainty? Overall, which (price or quantity) can we say may or may not increase/ decrease? Why?
- Predict what will happen in the hot dog (franks) market if the Heinz Petition succeeds in persuading bakeries to package hot dog buns in packages of 10 (instead of 8) while at the same time hog farms increase their breeding efforts.
First, assume Hot dog franks and buns are complements. The Heinz Petition is likely to affect demand for hot dog franks since it will no longer be necessary to buy 2 packages of buns for one pack of hot dogs.
Will this increase or decrease demand? (please answer)
Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it.
Did
Did quantity increase or decrease? (please answer)
Second, “….while at the same time hog farms increase their breeding efforts.”
Is this a demand or supply issue? (please answer)
Will this increase or decrease it? (please answer)
Please draw a graph to show the change and the effects on the new equilibrium. Be sure to label it.
Did price increase of decrease? (please answer)
Did quantity increase or decrease? (please answer)
When you look at both sets of graphs you drew, what happened to price in each case? (please answer)
What happened to quantity in each case? (please answer)
Overall, which can we say (price or quantity) will increase with certainty?
Overall, which (price or quantity) can we say may or may not increase/ decrease? Why?
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