Decrease In The Supply Of Sports Drinks A Drop In The ✓ Solved

A decrease in the supply of sports drinks A drop in the

Match the graphs with the following scenarios: A decrease in the supply of sports drinks, a drop in the average household income in the United States from $56K to $52K, an improvement in the bottling technology for premium bottled water, and an increase in the prices of electrolytes used in premium bottled water. What is the equilibrium price and quantity? Will there be a shortage or surplus if the price was $6? Why? How much is the shortage or surplus?

In December, the price of Christmas trees rises, and the quantity of trees sold rises. Is this a violation of the law of demand? Why or why not? The demand for plums is highest during summer and lowest during winter. Yet, plum prices are normally lower in summer than in winter. What must be happening to the supply of plums from winter to summer for the equilibrium price to fall?

Suppose you are trying to sell your 2015 Toyota Prius. At the last minute, the hybrid battery dies. You can pay $1000 to have it repaired, or sell the car "as-is." If you sell the car "as-is", you will get $9700 for the car, but if you fix it, you will receive $10800. Should you fix the car before selling? What if you will receive $10200 for the car after it's fixed? Explain using the concepts of marginal benefit (MB) and marginal cost (MC).

Based on your understanding of supply and demand curves from chapter 3, what do you think will likely happen to the price of gas and oil as the cases of coronavirus start to go down? Why? This is an initial post of at least 250 words.

Paper For Above Instructions

The dynamics of supply and demand play a crucial role in determining market equilibrium. When analyzing the market for premium bottled water and sports drinks, several economic factors must be taken into account. A decrease in the supply of sports drinks could lead to an increased price, assuming demand remains constant. This reflects the basic economic principle of scarcity—where limited supply drives up prices. Similarly, a drop in average household income in the United States may influence consumer purchasing behavior, causing a shift in demand as consumers opt for more affordable or essential goods, thus affecting market equilibrium.

Considering technological advancements, such as improvements in bottling technology for premium bottled water, it is expected that the supply of bottled water will increase, likely leading to lower prices and higher equilibrium quantities. Conversely, an increase in the prices of electrolytes utilized in premium bottled water would mean producers face higher production costs, which could reduce supply, elevate prices, and subsequently affect equilibrium.

To ascertain the equilibrium price and quantity in the market for premium bottled water, one would refer to the intersection of the demand and supply curves on a graph. For instance, if the equilibrium price of premium bottled water is identified as $5 per bottle, with an equilibrium quantity of 1 million bottles sold, it suggests that at this price, suppliers are willing to produce and sell exactly the quantity that consumers are willing to purchase.

If the price of bottled water rose to $6, there would be a surplus in the market. This is due to the fact that at this higher price, the quantity supplied would surpass the quantity demanded, leading to excess inventory for producers as buyers would pull back from purchasing at a higher price point. The magnitude of the surplus could be identified by assessing the difference between the quantities supplied and demanded at the $6 price point.

Turning to the analysis of Christmas tree pricing, where the price of Christmas trees rises alongside an increase in the quantity of trees sold, one could argue that this scenario does not violate the law of demand. The law of demand posits that as prices rise, demand typically decreases; however, this case may reflect increased seasonal demand rather than a straightforward price-consumption relationship.

In contrast, the situation surrounding plums demonstrates an interesting seasonal demand characteristic. Plums are in higher demand during the summer, yet their prices are lower compared to winter. This could imply increased supply during the summer months—perhaps due to a bumper crop—resulting in lower prices despite higher quantities sold, therefore, establishing a new equilibrium price during the peak season.

As for the decision-making process regarding the 2015 Toyota Prius, it is essential to apply the principles of marginal benefit (MB) and marginal cost (MC). If the car can be sold for $9700 "as-is," and fixing the hybrid battery would allow for a sale price of $10800, the marginal cost of repairing the battery ($1000) is less than the marginal benefit generated from its higher selling price ($1100). Thus, it would be economically rational to repair the vehicle prior to selling. If the post-fix sale price drops to $10200, the decision becomes reduced to comparing the MC to the new derived MB; in this case, it is advisable to fix the car as the $1200 profit outweighs the MC.

On a broader scale, as the COVID-19 pandemic restrictions ease and public activity resumes, it is anticipated that the demand for gasoline and oil would rise. Increased consumer mobility and resumption of travel will likely lead to a resurgence in prices as demand surges. The pre-existing supply constraints may further amplify price increases for gas and oil in a recovering economy. As observed, the elasticity of both supply and demand in these sectors will dictate the final outcome of pricing as the market stabilizes.

In conclusion, understanding the interconnectedness of supply, demand, and price in various contexts allows for a clearer comprehension of market behavior. Employing economic theories and data in analysis provides a robust framework for making informed decisions across complex market landscapes.

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