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Assignment on Economic Principle

   

Added on  2021-05-31

8 Pages1471 Words23 Views
Page 1 of 8ECONOMIC PRINCIPLE

Page 2 of 8Table of contents1.0 Question number 1...............................................................................................................32.0 Question number 2...............................................................................................................33.0 Question number 3...............................................................................................................44.0 Question number 4...............................................................................................................55.0 Question number 5...............................................................................................................6Reference....................................................................................................................................7

Page 3 of 81.0 Question number 1No, the demand curve for beef is not upward sloping. The beef market is downward slopingdemand curve following the law of demand.These phenomena that have been stated in thequestion can happen due to the substitute market for beef. For example, if chicken, asubstitute product of beef, experience a supply-side shock due to bird flu or other kinds ofdiseases in chickens can reduce the demand in the chicken market. Therefore the customersof the chicken market will shift to the beef market in order to meet their needs (Skousen,2015). As a result, the number of customers in the beef market will increase and hence thedemand curve will shift rightward increasing the price of beef. In this case, the beef market isexperiencing an increase in demand due to increased customers of the market and the price isalso going up. The equilibrium of the beef market changes due mainly due to the increase inthe customers and hence the demand for the product. It will rise or fall every time there is achange in the market of then substitute product. Figure 1: The beef market(Source: McKenzie and Lee, 2016)2.0 Question number 2a) The poor wine grape harvest in France has resulted in a low production level of rawmaterial in the French wine market of France. This is due to the fact that the poor harvest hasreduced the production of the wine grapes in the market (Rader, 2014). Thus, at each pricepoint, the sellers have sold fewer amounts pushing the supply curve to the left. Consequently,the price in the market has gone up and the wine production has reduced in the Frenchmarket.

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