Mba 5004 Week 2
A’rel Boies
South University
MBA 5004
Professor Zhenhn Jin
February 12, 2017 My calculations for the Vanda-Laye Corporation’s production of oven mittens by the, led to the following conclusions. . A price ceiling lower than $3.55 will cause a shortage in the market with increased demand and decreased supply. The equilibrium price point for manufacture is $3.55. Producers can supply 20 units and demand will equal supply. A floor price greater than the $3.55 will cause over production, and thus a surplus of the mittens. Consumers would reject the higher prices for the product and cause a decrease in demand. An increase in the prices of Sub Good A and Complimentary Good C, independently applied, will cause opposing effects . …show more content…
The demand curve for a good complementary to the oven mitten, (such as a baking dish purchased during the holiday season for example) will behave contrariwise. As the price of the dish rises, the demand for both the dish and the oven mitten will decline.
Bibliography
Compliments and Substitutes. (n.d.). Living Economics. Retrieved February 2017, from http://livingeconomics.org/article.asp?docId=289
Hirschey, M. (2009). Fundamentals of Managerial Economics (9th ed.). South-Western Cengage Learning. Retrieved 2017
(2006). Price Floors and Ceilings. In Handbook. Experimental Economics Center. Retrieved February 2017, from EconPort:
South University
MBA 5004
Professor Zhenhn Jin
February 12, 2017 My calculations for the Vanda-Laye Corporation’s production of oven mittens by the, led to the following conclusions. . A price ceiling lower than $3.55 will cause a shortage in the market with increased demand and decreased supply. The equilibrium price point for manufacture is $3.55. Producers can supply 20 units and demand will equal supply. A floor price greater than the $3.55 will cause over production, and thus a surplus of the mittens. Consumers would reject the higher prices for the product and cause a decrease in demand. An increase in the prices of Sub Good A and Complimentary Good C, independently applied, will cause opposing effects . …show more content…
The demand curve for a good complementary to the oven mitten, (such as a baking dish purchased during the holiday season for example) will behave contrariwise. As the price of the dish rises, the demand for both the dish and the oven mitten will decline.
Bibliography
Compliments and Substitutes. (n.d.). Living Economics. Retrieved February 2017, from http://livingeconomics.org/article.asp?docId=289
Hirschey, M. (2009). Fundamentals of Managerial Economics (9th ed.). South-Western Cengage Learning. Retrieved 2017
(2006). Price Floors and Ceilings. In Handbook. Experimental Economics Center. Retrieved February 2017, from EconPort: