Q1. What are the four major types of markets in microeconomic analysis?  What are the key characteristics that distinguish these markets?

Q2. The downturn in economic activity or recession in 2007 and 2008 forced many firms to develop new competitive strategies to survive.  Find examples of these strategies in various business publications.

Q3.  Suppose the demand and supply curves for a product are given by

QD=500-2P  &  QS=-100+3P

a. Graph the supply and demand curves.

b. Find the equilibrium price and quantity.

c. If the current price of the product is $100, what is the quantity supplied and the quantity demanded?  How would you describe this situation, and what would you expect to happen in this market?

d. If the current price of the product is $150, what is the quantity supplied and the quantity demanded? How would you expect to happen in this market?

e. Suppose that demand changes to QD=600-2P.  Find the new equilibrium price and quantity, and show this on your graph.

Q4.  The following discussion is drawn from :Chicken Producers in Price Pinch," Wall Street Journal, May 21, 2008.

It has been a tough year in the poultry business, with supply outpacing demand and feed-grain prices rising substantially.  But producers are hoping all that changes when the summer cook-out season starts.

The seasonal upswing in chicken consumption, along with the anticipated jump in spot-market poultry prices, could bring some reliefs to producers whose profit margins have been slashed by surging corn and soybean-meal costs.

Rising feed-grain prices, accelerated by the diversion of corn to make ethanol, have pushed up the cost of producing a live chicken by as much as 65% over the past two years.

Three factors make analysts more optimistic:  Companies are cutting production, weekly egg-set numbers are declining (egg sets are fertile eggs placed in incubators), and prices are responding positively to the decreasing supply.

The production slowdown is a response to the surge in feed-grain prices last fall.

Profit margins at producers will not improve unless spot-market prices for chicken move up fast enough to cover costs paid for corn and soybean meal to feed chicken flocks.