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  • The Hill Method (Senario1)

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    Alaa Bukhamseen
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    Google announced it will give staff a 10% raise which will impact the market for internet services. Using the supply and demand framework: 1) Initially the market is in equilibrium at a price PE and quantity QE. 2) The 10% raise increases staff income, shifting the demand curve for internet services right as demand increases. 3) With supply unchanged, the price and quantity of internet services both increase to clear the new market equilibrium. Higher income leads to increased demand and therefore higher price and quantity of internet services sold in the market.

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    The Hill Method ( Senario1)

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    Google announced it will give staff a 10% raise which will impact the market for internet services. Using the supply and demand framework: 1) Initially the market is in equilibrium at a price PE and quantity QE. 2) The 10% raise increases staff income, shifting the demand curve for internet services right as demand increases. 3) With supply unchanged, the price and quantity of internet services both increase to clear the new market equilibrium. Higher income leads to increased demand and therefore higher price and quantity of internet services sold in the market.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    33 views2 pages

    The Hill Method (Senario1)

    Uploaded by

    Alaa Bukhamseen
    Google announced it will give staff a 10% raise which will impact the market for internet services. Using the supply and demand framework: 1) Initially the market is in equilibrium at a price PE and quantity QE. 2) The 10% raise increases staff income, shifting the demand curve for internet services right as demand increases. 3) With supply unchanged, the price and quantity of internet services both increase to clear the new market equilibrium. Higher income leads to increased demand and therefore higher price and quantity of internet services sold in the market.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    SUPPLY AND DEMAND I THE HILL METHOD

    Problem: Google to Give Staff 10% Raise

    1. Price :

    Draw a supply and demand curve: Label all axis Label equilibrium Price I
    Quantity with 1

    PE
    PE Quantity: Internet Services

    2.
    QE
    Demand Supply
    (T) Taste (C) Cost
    Income for Nunber of
    (Yn) (#S)
    normal good Sellers
    Income for d1
    (Yi) (TECH) Technology
    inferior good
    Price of
    (P sub)
    substitute good
    Price of
    (Pc) complimentary
    good
    (#B) Number Buyers
    Expectations of
    (EXP p,y) changes in Price
    & Income

    (Px) Price of good (Px) Price of good


    3. Read Problem, and Star Determinant Changed

    4. Draw Formula to solve Problem: (always same), then fill in first three
    components

    DETERMINANT DEMAND SUPPLY PRICE QUANTITY


    (Yn) ↑ ↑ ─
    5. Change supply and demand curve accordingly: Then fill in last two
    components of Formula

    PE

    Quantity: Internet Services

    QE

    DETERMINANT DEMAND SUPPLY PRICE QUANTITY


    (Yn) ↑ ↑ ─  ↑ ↑ 

    6. List the conclusion :

    7. Justify the determinant that changed

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