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    Assignment 3 Business Economics Sweet Potato Case

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    Simon Erick
    This document analyzes the factors affecting the demand for sweet potatoes in the United States from 1949-1972. It finds that sweet potato demand is directly related to population, income, and the price of substitute white potatoes, but inversely related to its own price and time trend. The demand curve shifted left from 1949 to 1972, showing decreasing demand over time due to lower white potato prices and changing consumer tastes. While other variables like population and income increased demand, the document concludes the price of substitutes and time trend had a stronger impact on the falling sweet potato demand.

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    Assignment 3 Business Economics Sweet Potato Case

    Uploaded by

    Simon Erick
    74 views7 pages
    This document analyzes the factors affecting the demand for sweet potatoes in the United States from 1949-1972. It finds that sweet potato demand is directly related to population, income, and the price of substitute white potatoes, but inversely related to its own price and time trend. The demand curve shifted left from 1949 to 1972, showing decreasing demand over time due to lower white potato prices and changing consumer tastes. While other variables like population and income increased demand, the document concludes the price of substitutes and time trend had a stronger impact on the falling sweet potato demand.

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    This document analyzes the factors affecting the demand for sweet potatoes in the United States from 1949-1972. It finds that sweet potato demand is directly related to population, income, and the price of substitute white potatoes, but inversely related to its own price and time trend. The demand curve shifted left from 1949 to 1972, showing decreasing demand over time due to lower white potato prices and changing consumer tastes. While other variables like population and income increased demand, the document concludes the price of substitutes and time trend had a stronger impact on the falling sweet potato demand.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    74 views7 pages

    Assignment 3 Business Economics Sweet Potato Case

    Uploaded by

    Simon Erick
    This document analyzes the factors affecting the demand for sweet potatoes in the United States from 1949-1972. It finds that sweet potato demand is directly related to population, income, and the price of substitute white potatoes, but inversely related to its own price and time trend. The demand curve shifted left from 1949 to 1972, showing decreasing demand over time due to lower white potato prices and changing consumer tastes. While other variables like population and income increased demand, the document concludes the price of substitutes and time trend had a stronger impact on the falling sweet potato demand.

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    © All Rights Reserved
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    Assignment 3

    Business Economics
    Sweet Potato Case
    Syndicates 6
    Simon Erick - 29121289
    Joseph Gunawan - 29121036
    M. Hilmi Nukarim 29121199
    Mitranti Anindya Ayu - 29121020
    Background

    Quantity demand of sweet potatoes in United States in the period of 1949 - 1972 can
    increase/decrease by the some variables.

    1. price of sweet potatoes,


    2. total US population,
    3. real per capita personal disposable income,
    4. price of whte potatoes, and
    5. time-trend
    Analysis

    QDs = 7,609 - 1,606Ps + 59N + 947I + 479Pw -271t

    - Decreases by 1,606 for each $1 increase in its price (Ps)


    - Increases by 59 for each 1 million increase in population (N)
    - Increases by 947 for each $1,000 increase in income (I)
    - Increases by 479 for each $1 increase in the price of whte potatoes (Pw)
    - Decreases by 271 with each passing year

    From this equation, found that the quantity demand of sweet potatoes in United States directly
    proportional to the population, income, and substitutes’ price, but inversely proportional to its price
    and taste over year
    Analysis
    1. US Population increases by 58.05
    million from 1949 - 1972 1949 1972
    2. Income per capita US increases by
    N 150.73 208.78
    $1,430 from 1949-1972
    3. White potato price decrease by I 1.76 3.19
    $0.53 from 1949-1972
    4. Time trend shifted in consumer Pw 2.94 2.41
    appetite of using sweet potatoes
    from 1949-1972 t 1 24
    Analysis
    Demand Curve in 1949 Demand Curve in 1972
    Qds = 19,306 - 1,606Ps ; Ps1=7 ; Ps2=5,6 ; Qds = 17,598 - 1,606Ps ; Ps1=7 ; Ps2=5,6 ;
    Ps3=4 Ps3=4

    Qds = 19,306 - 1,606 (7) Qds = 17,598 - 1,606 (7)


    = 8,064 = 6.356

    Qds = 19,306 - 1,606 5,6) Qds = 17,598 - 1,606 (5,6)


    = 10.312.6 = 8.604.4

    Qds = 19,306 - 1,606 (4) Qds = 17,598 - 1,606 (4)


    = 12,882 = 11,714
    Analysis

    Demand Curve 1949 & 1972


    Conclusion

    ● Since the demand curve shifted to the left, this means that the demand of sweet
    potatoes from 1949-1972 is decreasing
    ● The decrease of sweet potatoes demand is affected by the price of white
    potatoes (substitute product) and time trend.
    ● Even though there are other factors, such as total US population, real per capita
    personal disposable income, but the price of white potatoes and time trend give stronger
    impact

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