Supply and Demand

Supply and Demand Order Description When plottin" rel="nofollow">ing graphs, it is required to properly label all axes and graphs. No graph should have a �mystery axis�or a �mystery function�. Use an essay format, and create supportin" rel="nofollow">ing graphs, to answer the followin" rel="nofollow">ing questions: Suppose we are examin" rel="nofollow">inin" rel="nofollow">ing the market for 240-foot in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines. Consumers (buyers) of these win" rel="nofollow">ind turbin" rel="nofollow">ines use them to generate electricity. For this analysis, we are in" rel="nofollow">interested in" rel="nofollow">in the demand for win" rel="nofollow">ind turbin" rel="nofollow">ines and the supply of win" rel="nofollow">ind turbin" rel="nofollow">ines � the supply and demand together create the win" rel="nofollow">ind turbin" rel="nofollow">ine market. Please use the model of supply and demand to analyze various market scenarios. Make the normal assumptionsabout the Laws of Supply and Demand, and also about the �determin" rel="nofollow">inants of demand� and the �determin" rel="nofollow">inants of supply.� Treat each scenario as a separate event. MC900432247[1] Interpret basic scenarios: Within" rel="nofollow">in the win" rel="nofollow">ind turbin" rel="nofollow">ine market, correctly identify the correct function (either the supplyof, or the demand for, win" rel="nofollow">ind turbin" rel="nofollow">ines) and the appropriate direction of change (in" rel="nofollow">increase or decrease), for each situation below. Illustrate each answer with a simple graph. Then, in" rel="nofollow">in a short paragraph, explain" rel="nofollow">in why it is a supply-side or demand-side change, and why the predicted change is an in" rel="nofollow">increase or a decrease. Treat each scenario as a separate event. A technological advance reduces the cost of production for in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines. The number of users [consumers] of in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines in" rel="nofollow">increases, because more firms in" rel="nofollow">in private in" rel="nofollow">industry are buyin" rel="nofollow">ing win" rel="nofollow">ind turbin" rel="nofollow">ines to generate power for themselves; in" rel="nofollow">in addition, a larger number of public utility companies are buyin" rel="nofollow">ing win" rel="nofollow">ind turbin" rel="nofollow">ines as a �greener� source of electrical power. Suppose natural gas is a form of energy as a consumer substitute for in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines as a source of power (as compared to in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines). What change is predicted in" rel="nofollow">in in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines if the price of natural gas energy decreases? Note: For example, in" rel="nofollow">in the USA, �frackin" rel="nofollow">ing technology� has greatly reduced the cost of takin" rel="nofollow">ing natural gas out of the ground, makin" rel="nofollow">ing natural gas a much cheaper form of energy. Suppose a government subsidy that had been available to the producers of win" rel="nofollow">ind turbin" rel="nofollow">ines is completely elimin" rel="nofollow">inated, and the cost of producin" rel="nofollow">ing win" rel="nofollow">ind turbin" rel="nofollow">ines rises, as the government subsidy is taken away. Predict the change in" rel="nofollow">in the win" rel="nofollow">ind turbin" rel="nofollow">ine market caused by the removal of the subsidy. Assume steel is a resource used in" rel="nofollow">in the production of in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines. If global steel prices decreasedramatically, predict the impact. Does the supply or the demand for in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines change? Why? What is the direction of change? Why? Suppose the entrepreneurs who make and sell in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines have the technological capacity to readily changeover their production operations to produce smaller residential win" rel="nofollow">ind turbin" rel="nofollow">ines. If the price and profitabilityof producin" rel="nofollow">ing residential win" rel="nofollow">ind turbin" rel="nofollow">ines in" rel="nofollow">increase, what is the impact on in" rel="nofollow">industrial win" rel="nofollow">ind turbin" rel="nofollow">ines? Suppose the model of Supply and Demand is used to make predictions about changes in" rel="nofollow">in the equilibrium price and the equilibrium quantity of corn. MC900436357[1] Interpret market scenarios: Within" rel="nofollow">in the corn market, predict the impact of changes in" rel="nofollow">in the determin" rel="nofollow">inants of demand or supply. In each scenario, identify the correct function (either corn supply or corn demand) and the appropriate direction of change (in" rel="nofollow">increase or decrease), for each situation below. Then use the analysis to predict the impacts of the change on the equilibrium corn price and equilibrium quantity of corn. Illustrate each answer with a simple graph. Remember, some complex analyses can produce the end-result of an �in" rel="nofollow">indetermin" rel="nofollow">inate change� in" rel="nofollow">in either the equilibrium price or quantity. Then, in" rel="nofollow">in a short paragraph, explain" rel="nofollow">in why the change in" rel="nofollow">in the market equilibriums occurred, and whether they �make sense� in" rel="nofollow">in comparison to outcomes in" rel="nofollow">in the real world market for corn. Treat each scenario as a separate event. Suppose above-normal growin" rel="nofollow">ing conditions (near-perfect weather, ideal soil moisture, no pest in" rel="nofollow">infestations, etc.) create a �bumper crop� of corn. Use supply-and-demand to predict the impact of the bumper crop on the equilibrium price and equilibrium quantity of corn. When you perform this analysis, compare the market reaction as the corn-growin" rel="nofollow">ing production conditions change from normal to above-normal growin" rel="nofollow">ing conditions. Are the predicted results of the model consistent with what typically happens in" rel="nofollow">in commodity markets when above-normal growin" rel="nofollow">ing conditions impact agricultural production? Why is it important that the predicted results of a model be consistent with reality? Suppose corn is a viewed as a �normal good� from the consumer household in" rel="nofollow">income perspective. If a worldwide recession reduces household consumer in" rel="nofollow">incomes on global scale, use supply-and-demand to predict the impact of decreased consumer in" rel="nofollow">income on the equilibrium price and equilibrium quantity of corn. Suppose the corn market is impacted by multiple forces, and a complex supply and demand analysis is required. In this scenario, suppose that an in" rel="nofollow">increased number of corn consumers enter the corn market because they are purchasin" rel="nofollow">ing corn to meet a growin" rel="nofollow">ing demand for corn-based ethanol. Simultaneously, the US Department of Agriculture in" rel="nofollow">increases subsidies for corn production, in" rel="nofollow">in an effort to support/stabilize farm in" rel="nofollow">income. Apply the supply-and-demand model to predict the impact of these two changes on the equilibrium price and equilibrium quantity of corn. Suppose corn producers can readily change-over their operations to produce soybeans in" rel="nofollow">instead. Assume it is simple for a producer to grow corn or soybeans on a piece of land � the producer simply decides to change the crop in" rel="nofollow">in the next growin" rel="nofollow">ing season. Assume there is a notable in" rel="nofollow">increase in" rel="nofollow">in both the price and profitability of soybean production. What will be the predicted impact on the corn market, because of the producer�s reaction to better profits growin" rel="nofollow">ing soybeans? Does the supply or the demand for corn change in" rel="nofollow">in this scenario? Why? What is the impact of this change on the equilibrium price and equilibrium quantity of corn? Is this predicted result consistent with real-world market outcomes? Explain" rel="nofollow">in.