Posted: March 31st, 2016

How do supply, demand, and price controls interact to affect equilibrium price

Research the elasticity of beef and eggs in regards to price changes. How do supply, demand, and price controls interact to affect equilibrium price of eggs? Why do customers have a more elastic buying response to beef than to eggs?

What would be the consumer buying response to Coca Cola if the price of Pepsi doubled? If the prices of Coca Cola and Pepsi remained constant, what would be the consumers typical buying response to these products if their income was reduced by 30%? Suppose all carbonated beverages tripled in price. How would the concepts of utility, income, and substitution predict consumer behavior based on the rise in the cost of carbonated beverages?

What are the determinants of demand and what happens to the demand curve when each of these determinants change? What is the difference between a change in demand and a change in the quantity demanded?

2.1 Analyze the interaction of supply, demand, and price ceilings on the market equilibrium price, the concept of elasticity to changes in product price, consumer income, and competitor price, Explain how the concepts of utility, income, and substitution predict consumer behavior when a price changes.