Assignment 3: Demand and Supply
$3.00
The use of E-Books has increased in recent years, especially with the advent of mobile E-Readers. A marketing research firm recently developed the following supply and demand schedules for E-books:
|
Price/E-Book |
Quantity Demanded |
Quantity Supplied |
| $18 | 4000 | 10,000 |
| 16 | 5000 | 9500 |
| 14 | 6000 | 9000 |
| 12 | 7000 | 8500 |
| 10 | 8000 | 8000 |
| 9 | 9000 | 7500 |
| 8 | 10000 | 7000 |
| 7 | 11000 | 6500 |
| 6 | 12000 | 6000 |
| 5 | 13000 | 5500 |
| 4 | 14000 | 5000 |
| 2 | 15000 | 4500 |
Questions:
- Construct a graph showing supply and demand in the E-Book market, using Excel.
- How are the Laws of Supply and Demand illustrated in this graph Explain your answers.
- What is the equilibrium price and quantity in this market?
- Assume that the government imposes a price floor of $12 in the E-Book market. What would happen in this market?
- Assume that the price floor is removed and a price ceiling is imposed at $6. What would happen in this market?
- Now assume that the price of E-Readers (used with E-Books) drops by fifty percent. How would this change impact the demand for E-Books? Explain your answer and reconstruct the graph developed in question one to show this change.
Present your analysis in Excel format. Enter non-numerical responses in the same worksheet using textboxes.
If you want to learn how to use Microsoft Excel to create curves, refer to the MS Excel tutorials placed.