Reference no: EM132856510
Criteria 1.1 Analyse the relationship between demand and supply.
Question 1.
Case study OPEC - The Rise and Fall and Rise Again of a Cartel.
a) Who are likely to be the (i) demanders and the (ii) suppliers of oil?
b) Suggest factors which are likely to affect the (i) demand for and (ii) supply of oil in world markets?
c) Explain, using examples from the data, how changes in demand and supply have:
(i) Raised the price of oil;
(ii) Reduced the price of oil.
Question 2
The weekly demand and supply schedules for t-shirts (in millions) in a free market are as follows:
Table a.
Price (£)
|
8
|
7
|
6
|
5
|
4
|
3
|
2
|
1
|
Quantity demanded
|
6
|
8
|
10
|
12
|
14
|
16
|
18
|
20
|
Quantity supplied
|
18
|
16
|
14
|
12
|
10
|
8
|
6
|
4
|
2a) What is the equilibrium price and quantity?
2b) Assume that changes in fashion cause the demand for t-shirts to rise by 4 million at each price
Table b
Price (£)
|
8
|
7
|
6
|
5
|
4
|
3
|
2
|
1
|
Quantity demanded
Quantity supplied
|
18
|
16
|
14
|
12
|
10
|
8
|
6
|
4
|
(i) Create a table as above and input the missing data. Label it Table c
(iii) What will be the new equilibrium price and quantity?
(iv) Has equilibrium quantity risen as much as the rise in demand?
(v) Explain why or why not.
2c) Now plot the data in the table (table a) on to a graph and mark the equilibrium. Also plot the new data corresponding to (table c) and mark the new equilibrium.
2d) Discuss the factors that could cause the demand curve to shift to both the left and the right.
Question 3
Criteria 1.2 Analyse the concept of market orientation, E.g. monopolistic, oligopolistic, monopoly and perfect competition and explain their significance to business
3a) It is usual to divide markets into four categories under which firms operate. List and describe (in ascending order of firms'' market power) the four categories using examples where appropriate.
3b) Outline the differences, using examples, between the four categories using a table layout.
3c) Choose one of the following:
(i) Consider this highly contestable monopoly: A bus company operating a particular route.
How well is the consumer''s interest served?
OR
(ii) An example of monopolistic competition is provided by fast-food restaurants.
What other businesses are in competition with fast-food restaurants and what determines the closeness of this competition?
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