Week 1

Topics: Supply and demand, Consumer theory, Inverse demand function Pages: 2 (636 words) Published: December 4, 2014
Week 1-1
•Answer the following discussions based on the Katrina’s Candies scenario: From the scenario for Katrina’s Candies, examine the key factors affecting the demand for and the supply of a good in general and Katrina’s Candies specifically. Distinguish between a change in demand and a change in the quantity demanded (movement along the demand curve). The key factors affecting the demand and supply of goods are price, income, price of related goods, preference or tastes, and number of buyers. As it relates to Katrina’s Candies, there are many contributing factors as they are a small family owned candy-manufacturing company and rely on internet transaction to conduct significant portions of their business. These factors may affect the operational growth to international consumers outside of the United States. A change in demand is when there is a shift which causes a trend to either raise or decrease. A change in quantity demand is when the amount of good is at demand at a particular price. The supply of a product should be closely related to the demand of that product. As the product gets more expensive, the curve representing demand begins to trend downward, as fewer people buy the product, before eventually leveling off as the product becomes too expensive for anyone to buy. From the above, indicate the factors that are responsible for a shift in demand; and explain how the change is effected by these factors. The factors that are responsible for a shift in demand are: income, preference of taste, price of related goods, and number of buyers. The price or cost of a product is the main factor that affects demand. Most individual’s gauge whether they will buy a product or not by how much it cost. If any of the factors change than it could affect growth and the ability to maintain profitable. Indicate the factors that are responsible for a shift in supply; and explain how the change is affected by these factors. The factors that is responsible for...
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