Managerial Economics: Analysis of Festive Goods Market

Running Head: MANAGERIAL ECONOMICS
Managerial Economics
Name of the Student
Name of the University
Author note

1MANAGERIAL ECONOMICS
Table of Contents
Answer 4....................................................................................................................................2
Answer a.................................................................................................................................2
Answer b................................................................................................................................3
Answer c.................................................................................................................................4
Answer d................................................................................................................................5
Answer e.................................................................................................................................6
References..................................................................................................................................8

2MANAGERIAL ECONOMICS
Answer 4
Answer a
Figure 1: Market of festive good
(Source: as created by Author)
Figure 1 portraits the market of festive goods. The demand for festive goods is
presented as DD. SS curve represents the supply curve for festive goods. Demand and supply
balances at point E. Price is P0 and quantity is Q0. During festive seasons, people increases
demand for festive goods because of their increasing preferences for these type of goods.
When people’s demand changes for factors other than price then this cause a change in
demand reflected by a shift of the demand curve (Maurice & Thomas, 2015). When demand
increases then demand curve shifts rightward. During a decrease in demand, the demand
curve shifts inward. In the festive season, because of increasing preference the demand curve
shifts rightward. After change in demand, the new demand curve is D1D1. With the new
demand curve and existing supply curve, the usual demand-supply equilibrium is attained at