11DP - Demand and Supply

Demand
1. What would happen to the demand for bicycles if there were a large increase in the tax
on motor scooters?
there would be a greater demand in bicycles if the tax on scooters went too high and the
price of gas went over $10 a gallon. tax on a scooter is still far less than the tax on a car
or motorcycle.
2. What would happen to the demand for foreign holidays if there were an increase in
incomes?
As the incomes of the population increase, the demand for foreign holidays would
increase, as there would be more consumers spending money to be used for holidays
and leisure. This will result in more holidays booked at any given price. Therefore, it is a
price determinant.
3. What would happen to the demand for DVDs if there were a significant fall in the price of
DVD players?
The demand for DVDs will increase if there were a significant fall in the price of DVD
players. As the price decreases, the quantity demand tends to always increase.
Therefore, it is a price determinant.
4. What would happen to the demand for cars if there were a significant increase in the
level of income tax?
The demand for cars would decrease as if there were a significant increase in the level of
income tax, which causes the graph to shift to the left. Therefore, it is not a price
determinant.
5. What would happen to the demand for ice creams if the price of ice creams went up?
The demand for ice cream will decrease if the price for it increases or went up. As it is a
price determinant so the graph moves along the line.
6. What would happen to the demand for a certain brand of bottled water if there was an
article about the lack of purity of the source of the water in a national newspaper?
The demand for that certain brand of bottled water will decrease. Because people will not
want to consume the lack of purity of the source of the water. Therefore, it is not a price
determinant.
7. What would happen to the demand for carrots if there was an increase in the size of the
population?
Because there is an increase in the population, the demand for carrots will increase as
the population increases, which means that society needs more carrots. Therefore, it is
not a price determinant.
Supply
1. What would happen to the supply of bicycles if there were a large increase in the tax on
bicycles?
The taxes increase the price of the bicycles, but the money won´t go to the producers so
fewer products are supplied for the same price.
2. What would happen to the supply of foreign holidays if there were a fall in the price of
foreign holidays?
The change in the curve would just be a movement along the line because the price is
one of the axes. The supply would decrease when the prices of holidays would fall.
3. What would happen to the supply of DVDs if there were a significant increase in the
price of the components used to make DVDs?
The producers would expect a fall in demand for DVDs because DVDs complements´
demand is going to fall, so the supply of DVDs would decrease and the curve would shift
to the left.
4. What would happen to the supply of cars if the government were to subsidize car
production in order to protect employment?
The costs for producers would reduce when the government subsidizes car production,
so the producers could supply more at the same price. That´s why the curve would move
to the left.
5. What would happen to the supply of white bread if a firm were to discover that there has
been a large increase in the demanding dark bread, which could also produce
The firm would start to produce dark bread and reduce the supply of white bread, which
would shift the curve to the left.
6. What would happen to the supply of a certain brand of bottled water if there were an
improvement in the technology used to produce it?
The improvement of technology in producing bottled water would make the supply
increase and the curve would shift to the right.
7. What would happen to the supply of carrots if the farmer decided to preserve the
environment By farming in a more traditional manner, instead of making more profits?
The price of the same quantity would increase because of the more traditional way of
farming would be more expensive to produce. That´s why the curve would shift to the
left.

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