Market Supply and Market Demand Analysis Essay
Perform two analyses—one on the demand side and one on the supply side of a market—using the supply and demand analytical procedure in Section 3.3 of the Greenlaw, Shapiro, & Taylor (2018) textbook.
Step 1. Draw a demand and supply model before the economic change took place. To establish the model requires four standard pieces of information: The law of demand, which tells us the slope of the demand curve; the law of supply, which gives us the slope of the supply curve; the shift variables for demand; and the shift variables for supply. From this model, find the initial equilibrium values for price and quantity.
Step 2. Decide whether the economic change you are analyzing affects demand or supply. In other words, does the event refer to something in the list of demand factors or supply factors?
Step 3. Decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram. In other words, does the event increase or decrease the amount consumers want to buy or producers want to sell?
Step 4. Identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity.
Be sure to start with the list of factors that influence demand in Figure 3.9 and the list of factors that influence supply in Figure 3.15. (A market is a forum where a particular product is traded between seller and buyer leading to the determination of price and quantity for that particular product.)
To the best of your ability go through the 4-step process described in Section 3.3 of the Greenlaw, Shapiro, & Taylor (2018) textbook.
Start with identifying the initial market circumstance—typical or average price, typical or current volume of sales (quantity). Support your description with information from research sources that can include newspapers or news (including business) magazines, credible blogs, research institute reports, government reports, or peer-reviewed articles.
In these research sources look for descriptions of the factors that influence demand and factors that influence supply. Explain from textbook theory and the research sources how this implies a change in the factor in a particular direction (increase or decrease) which is associated with a change in demand (first) and supply (second). Explain how the factor changes demand.
Finish the 4-step analysis by describing what the final market circumstance is: what is the price and volume of sales after the factor has changed. Give quantitative answers if possible or give qualitative answers (higher price or lower price; higher quantity or lower quantity—or some combination of these outcomes).
The conclusion to your essay should include investigation for what the change in the market (and consequent change in price and sales volume (quantity)) means to the businesses selling the product and the costumers buying the product.
Use of appropriate supply and demand diagrams is expected to be used in describing your analysis. Use of appropriate charts displaying relevant data (FRED charts, for example) would be useful to describe the trend and changes in the factors that influence demand or supply.
Find eight to twelve (6-10) worthwhile articles about the market that you are studying. The textbook and sources of data or charts do not count toward the 8-12 references described here. You may use appropriate websites—but you want to be very careful of bias and reliability of information. Some websites are not to be used: www.wikipedia.org or www.investopedia.com are examples.
Write an essay that is less than 3 pages in textual material. Title page, reference list page, and appendices with exhibits do not count toward the 3-page maximum. The instructor strongly urges that students follow the APA Style Manual, but any consistently applied style standard can be used. The essay should be well-organized, coherent, and integrated. The essay should be consistently formatted, written, and organized from start to end.
Your analysis should use the key concepts and terminology of microeconomics within your presentation. You should rely on textbook definitions, explanations, and analyses—but always remember application, rather than regurgitation is important. You should use graphical or tabular displays of data with commentary.
Supply & Demand Analysis Essay, continued on next page
Supply & Demand Analysis Essay, continued
A partial list of worthwhile periodicals or websites to use follow:
⦁ the economist
⦁ Wall Street Journal
⦁ Fortune Magazine
⦁ Forbes Magazine
⦁ the Financial Times
⦁ Business Week
⦁ Los Angeles Times Business Section
⦁ Orange County Register Business Section
⦁ Los Angeles Times Editorial Section
⦁ Orange County Register Editorial Section
www.cnbc.com (look under News/Economy)
⦁ Or…identify a macroeconomic concept and “Google” it.
You must not use the following sources or types of sources in your required 8-12 articles.
⦁ Online encyclopedia
⦁ Online dictionaries
⦁ Online economics dedicated websites (that replicate textbook material; even if you don’t have doubts, ask.)