Calculate the new quantity and plot the new demand curve

Reference no: EM132478151

Scenario or Tasks

Assessment Task 1. The following shows the demand equation for a product:
D = 480 - 4p where p is price in £

(i) Calculate the table below and show quantity demanded (Qd):

Plot the demand curve D1 on a graph.

Price 0 10 20 30 40 50 60 70
Quantity(Qd)

(ii) The company has an advertising campaign that significantly promotes the brand of their product. This changes the demand equation to:

D = 500 - 3p where p is the price in £

Calculate the new quantity below and plot the new demand curve as D2 against the original demand curve.

Price 0 10 20 30 40 50 60 70
Quantity(Qd)

iii) Look at your graph and use your knowledge of price elasticity to explain the effect of the advertising.

Assessment Task 2: Answer each question in one line only.

i) What would happen to the supply of bicycles if there were a large increase in the tax on bicycles?
ii) What would happen to the supply of foreign holidays if there were a fall in the price of foreign holidays?
iii) What would happen to the supply of DVDs if there were a significant increase in the price of the components used to make DVDs?
iv) What would happen to the supply of cars if the government were to subsidize car production in order to protect employment?
v) What would happen to the supply of white bread if a firm were to discover that there has been a large increase in the demand for brown bread, which they could also produce?
vi) What would happen to the supply of a certain brand of bottled water if there were an improvement in the technology u sed to produce it?

Assessment Task 3 Mr. Brown has managed to gain a pay rise of OMR 1,000 per annum. His salary per annum is now OMR 8,000. This means that he will now take two cruises for vacations instead of one. Calculate the income elasticity of demand.

Reference no: EM132478151

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