Managerial Economics: Uber Service Market and Land Supply and Demand

Running head: MANAGERIAL ECONOMICS
Managerial Economics
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1MANAGERIAL ECONOMICS
Table of Contents
Part A...............................................................................................................................................2
Question 1....................................................................................................................................2
Question 2....................................................................................................................................5
References list..................................................................................................................................7

2MANAGERIAL ECONOMICS
Part A
Question 1
Question a
Following the occurrence of severe storms, demand for Uber service increase as people
willing to get out from storm hit areas. Supply of Uber service however fails to match the
increased demand (Moulin, 2014) This leads to a shortage in the market. This is explained with
the aid of the following figure.
Figure 1: Impact storm in Uber service market
Demand and supply function for Uber service is given by D0D0 and S0S0 respectively.
Difficulty in accessing subways, unavailability of transportation and other factors cause a hike in
Uber demand after storms. Due to the hike in demand, demand curve alters with a higher demand
curve of DD. If Uber continues to chare same price, there would be a shortage in the market as
shown in the figure.