What changes in the macroeconomic environment are discussed

Reference no: EM132494699

Assignment: The following discussion is drawn from "Prices of Wood Products Plunge, Indicating Volatility in Industry, "Wall Street Journal, August 25, 1999

Wood-product prices have plunged from their record and near record levels of only a few week ago amid an unexpected supply glut... Analysis cautioned that any slowdown in either the economy or housing market could cut short a resurgence in the timber industry that has been under way for much of the year.... markets will stabilize and even rebound as housing and remodeling activity pick up- as long as the Federal Reserve doesn't move to raise interest rate too much.

The supply of wood products recently exceeded demand in art because of the unusually hot summer weather in many parts of the country. That led to construction delays that backed up timber products in the distribution pipeline....

During the second quarter of 1999, the industry pulled out of a two-year slump that was prompted by an oversupply of wood products and slackened demand from Asian markets... Aside from being prone to vagaries of economic cycles... the industry suffers from being fragmented into thousands of producers who frequently manufacture excess quantities.

A. Using standard demand and supply curves, describe and illustrate the effect on the equilibrium price and quantity in the wood products marked of (1) the unexpected supply glut, (2) a slowdown in the economy or the housing market, (3) the hot summer in many parts of the country, and (4) the impact of changes in the Asian Markets.

B. What changes in the macroeconomic environment that impact the wood products industry are discussed in the excerpt?

C. What facts in the excerpt indicate that the wood products industry is highly competitive?

Reference no: EM132494699

Questions Cloud

What is the company corporate strategy : From the annual reports you previewed, what is the company's corporate strategy? What are their company goals and were they successful in achieving those goals?

Difference between the stock price and the exercise price : Assuming a stock price of $10, give an example of an "in the money" call option. Assuming the option has one month before expiry, indicate if the option price

Find what is the length of the firms cash conversion cycle : If annual sales are$4,380,000 and all sales are on credit, what is the firm's investment in accounts receivable? What is the length of the firm cash conversion

Why would a company seek to make an investment : Describe the relationship between a company's working capital management and its profitability? How and why would a company seek to make an investment? Explain.

What changes in the macroeconomic environment are discussed : What changes in the macroeconomic environment that impact the wood products industry are discussed in the excerpt? What facts in the excerpt indicate that the.

What is the average amount of receivables : What would happen to average receivables if Snider toughened its collection policy with the result that all nondiscount customers paid on the 45th day?

Analyze the probability that a recession will occur : Explain how an economist could use the slope of the yield curve to analyze the probability that a recession will occur and why the spread may matter?

Calculate the nominal annual cost of nonfree trade credit : Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume that payment is make either on the discount date.

How do different leadership styles and models contribute : How do different leadership styles and models contribute to an individual's motivation? Based on your leadership evaluation, what motivates you?

User Account

All Pages