Assignment 3: Demand and Supply
The use of E-Books has increased in recent years, especially with the advent of mobile E-Readers. A marketing research firm recently developed the following supply and demand schedules for E-books:
|Price/E-Book||Quantity Demanded||Quantity Supplied|
Using Microsoft (MS) Excel, construct a graph showing supply and demand in the E-Book market based on the data above. (Save this file because you will re-work it later in the assignment.) When finished, copy and paste or import your graph into an MS Word document.
(Tutorials for working with MS Excel and MS Word can be found through theTutoring Services and Tutorials link at the top of the page.)
In your MS Word document, below your imported graph, respond to the following:
- Explain how theLaws of Supply and Demandare illustrated in this graph.
- Describe theequilibrium price and quantityin this market.
- Assume that the government imposes aprice floorof $12 in the E-Book market. Explain what would happen in this market.
- Assume that the price floor is removed and a price ceiling is imposed at $6. Explain what would happen in this market.
- The price of E-Readers (used with e-Books) drops from $60 by fifty percent.
- Now, assume that the price of EReaders (used with EBooks) drops from $60 by fifty percent.
- How would this change impact the demand for E-Books? Explain your answer.
- Then, reconstruct your original graph to show this change and place it in your MS Word document below your explanation.