Dscribe difference between normal good and inferior good

Reference no: EM13389818

You have been hired by a new firm selling electronic dog feeders. Your client has asked you to gather some data on the supply and demand for the feeder, which is given below, and address several questions regarding the supply and demand for these feeders.

Price/Feeder	Quantity Demanded	Quantity Supplied
$300	500	1800
270	600	1700
240	700	1600
210	800	1500
180	1000	1400
150	1100	1300
120	1200	1200
90	1300	1100
60	1400	1000
30	1500	900
10	1600	800

Your client has asked that you develop a report addressing the following questions so that you can present these findings to their Board of Directors:

Questions:

1. Construct a graph showing supply and demand in the electronic dog feeder market, using Microsoft Excel.
2. How are the laws of supply and demand illustrated in this graph? Explain your answers.
3. What is the equilibrium price and quantity in this market?
4. Assume that the government imposes a price floor of $180 in the feeder market. What would happen in this market?
5. Assume that the price floor is removed and a price ceiling is imposed at $90. What would happen in this market?
6. Now, assume that the price of feeders drops by 50%. How would this change impact the demand for feeders? Explain your answer and reconstruct the graph developed in question one to show this change.
7. Assume that incomes of the consumers in this market increases. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
8. Assume that the number of sellers decreases in this market. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
9. Explain the difference between a normal good and an inferior good. Would your answers to question 7 change depending on whether this good is a normal or inferior good? Why?

Reference no: EM13389818

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