Microeconomics Question Consider a market transaction that you have undertaken as a consumer which was notable because it is particularly recent, large or unusual. Basically I want you to think of something that you have bought, it could be anything (though hopefully something more interesting than a loaf of bread). Then in the following parts of the questions you will need to analyses it.
Analyses this transaction from a micro-economic standpoint: Explain how & why (from the perspective of the firm or supplier), the good or service n question was created, and the reason you entered the market to secure this product or service, (30%) Think about what resources went in to the production of the good, and what is the reason that the firm decided to enter to market by producing and supplying that good. Explain why you decided to buy the good from ‘demand’ point of view. . Illustrate in general terms the factors on the demand or supply side that will have influenced the price you paid for this product. Show what might happen to the price of the product if one of these factors changes (30%) Talk about the factors that affect the supply of the good and the demand for the DOD. The demand will be in general, so not your individual demand, but the overall demand. The factors affect the supply/demand, and therefore shift the supply and demand curves.
This obviously will have an effect on the price of the good. Choose one of the factors you have said affect supply and demand, then analyses what happens when that factor changes. Assess whether the product in question is likely to be price elastic or inelastic at the current market price. Following this assessment describe the likely impact on the supplying company’s revenue following an increase in the price they charge (other hinges being equal) (40%) Think about what you would expect the elasticity of the good you have chosen to be.
This is obviously at the price you bought it, and therefore the current market price. Once you have assumed the elasticity you can then analyses what would happen to total revenue due to an increase in price. You can do this by plotting supply and demand curves that look like they have the elasticity you expect and then see the effect of an increase in price. Macroeconomics Assignment Explanation By Farman-Hashish guide as to how you should structure your answer in terms of sections.
