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Assignment: Chapter 3: In chapter 3 we learn that the supply and demand for a good or service can shift in response to changes in certain variables, and about how supply and demand interact to determine the market equilibrium price.
1. Please identify a price change you have observed in the last few years.
2. Use the supply and demand model to explain why the price changed in 1) above.
3. Summarize your explanation with one sentence that mentions what you think has happened to both supply and demand,and why, and how this interaction has resulted in the price change you observed. If both curves are moving, you will need to comment on the relative size of each shift to justify the price change you observed.
Please do not try to explain the price of gas or a cell-phone; please pick something else.
Helpful tip: be sure you discuss both supply AND demand, as they both play a role in determining the price.
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