Name: Joyce Sherly Ann Lucero.

Section: BSA - 2A

Economic development: Prelim Quiz (Demand, Supply Equilibrium)

Situational Problem:

1. Beef supplies are sharply reduced because of drought in the beef-raising states, and consumers turn
to pork as substitute for beef. How will you explain and illustrate this change in the beef market in
supply and demand terms?

Consumers will opt to buy pork over beef due to the said circumstance. As pork is a substitute of
beef, it possesses some same features with that of beef's because of that, the demand for beef will
decrease as well as its supplies,and the pork's demand and supply will increase.

2. In December, the price of Christmas trees rises and the number of trees sold also rises. Is this a
violation of the law of Demand? Explain

The increase in price of Chrismas tree is because of the season. And one of factor that affect the
demand curve is Occasional or seasonal products. Suppliers can take minimal advantage to seasonal
products since consumers will still buy it regardless of price increase because it is considered a necessity
on that moment. Ther is no violation of the law of suppy and demand as long as the company follows
rules prescribed by the authoriy regarding price increase.

3. A firm charges Php 8000 for its unique processor. If the total revenue is Pho560000 in July, how many
word processor will be sold that month?

Total revenue= price x quantity

Or revenue÷ quantity

560,000÷ 8000 = 70

There will be 70 procesors sold for that month

4. The government places a tax on rubber. What will happen to the market for car tires?

The market for ca tires will raise price per tire since a tax has been added to the product. They will
charge it to the customer through adding it to tire's sale retail price. As an effect of the price increase,
consumers will opt to find a substitute or any way and that could cause a problem to the car tire's
market.
5. Consider a market supply and demand represented by the following;

Qd = Qs

Qs = 4P – 120

Qd = 1000 - 10P.

Calculate the equilibrium price and Quantity and plot in a graph.

5. 1 Price

1000-10P = 4p=120

1000+120=4p+10P

1120= 14P

1120/14= 14p÷14

80=p

5.2. Equilibrium

1000-10(80)=4(80)-120

1000-800=320-120

200=200

Q=200