Demand and Supply Sample Homework

Question: Given the products below and the events that affect them, indicate what happens to demand or supply, and the equilibrium price and quantity in a competitive market. Identify the determinant of demand or supply that causes the shift. Justify your answers fully in each case.

(a) Home heating oil. There is a severe winter in the regions using the oil; the cost of a barrel of oil rises for producers of home heating oil.

(b) Organic foods. People become more concerned about chemical additives in food; traditional farms are switching to more organic methods.

(c) Film cameras. The price of digital cameras falls for consumers; there is a decline in the number of stores selling film cameras.

(d) Bread. Many consumers adopt a low carbohydrate diet and avoid bread products; the price of flour falls for bread producers.