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Assignment on Economic Principles

   

Added on  2021-05-30

8 Pages654 Words81 Views
Economic Principles 1ECONOMIC PRINCIPLESBy (Name)The Name of the Class (Course)Professor (Tutor)The Name of the School (University)The City and State where it is locatedThe Date
Assignment on Economic Principles_1
Economic Principles 2Economic PrinciplesQuestion 1No, it just means the demand curve has shifted upwards increasing both price and demand (supply has increased, demand has increased, and price has increased). Nevertheless, the demandcurve still assumes a downward sloping trend[ CITATION OSu12 \l 1033 ]. 02000400060008000100001200014000$0 $20 $40 $60 $80 $100 $120 Beef MarketNew Demand CurveSupply CurveOld Demand CurveQuantityPriceQuestion 2Part a). There is increased demand for wine because poor harvest significantly reduced the supply of wine in France. As such, there is a gap in the market creating unfulfilled demand[ CITATION OSu12 \l 1033 ]. This can be illustrated as follows
Assignment on Economic Principles_2
Economic Principles 3020004000600080001000012000$0 $20 $40 $60 $80 $100 $120 Supply is less Than DemandOld DemandOld SupplyQuantityPricePart b). The Australian market will reduce any supply surplus that is not sold in the domestic market by selling it in the France market. With this increased demand for wine abroad the price of wine in the domestic market will also increase as the supply of wine in the market reduces (reducing demand)[ CITATION OSu12 \l 1033 ]. Hence the supply curve will shift upwards-2000020004000600080001000012000$0 $20 $40 $60 $80 $100 $120 Supply will reduce increasing Price and reducing demandOld DemandOld SupplyNew SupplyQuantityPriceQuestion 3
Assignment on Economic Principles_3

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