Our orders are delivered strictly on time without delay
Paper Formatting
Double or single-spaced
1-inch margin
12 Font Arial or Times New Roman
300 words per page
No Lateness!
Our orders are delivered strictly on time without delay
Our Guarantees
Free Unlimited revisions
Guaranteed Privacy
Money Return guarantee
Plagiarism Free Writing
Research, Changes in supply and demand
analyze how external factors affect the supply and demand curves. Select one of the following cases. Analyze the impact of these events on the markets, on the supply and demand curves, and consequently, prices and volumes:
Technological improvements related to cellphones. The impact of the pandemic on the supply chain. The impact of the war in Ukraine on commodities such as oil and grain. The impact of raising taxes on tobacco. Technological changes related to electric vehicles versus traditional cars in the car markets. Increases in interest rates of mortgage loans on the real estate market. You must explain how the supply and demand curves are affected: do they shift to the right or left? Do they change their slope? What happens with the new equilibrium prices and sales volumes? Do they affect the elasticity of the demand or supply?In the short term, did the curve shift or was there only slippage on that curve? If the curve shifted, did it shift to the right or to the left? As it shifted, was there a shortage or excess in quantities demanded/supplied? As a result, what happened to the equilibrium price? To the equilibrium quantity? Finally, you should copy the supply and demand model scenario that best illustrates your answers. You should also explain your projections in the long run. What will happen in the long run with equilibrium prices and quantities? Explain why. In this section, you sho
Full Answer Section
Equilibrium Quantity: The lower price and increased supply lead to an increase in the equilibrium quantity of cellphones sold.
Demand: The demand curve may also be affected, though perhaps to a lesser extent in the short-term. As cellphones become more feature-rich and affordable, some consumers who previously couldn't afford them might enter the market or existing users might upgrade sooner. This would also shift the demand curve slightly rightward, but the primary driver in the short term is the supply-side change.
In the long run, the impact of technological improvements on the cellphone market becomes more pronounced.
Continued Supply Increase: The initial rightward shift of the supply curve continues as manufacturers further refine their processes and technology. Moreover, new entrants attracted by the growing market and lower production costs might join the market, increasing the supply.
Demand Adjustment: The demand curve also adjusts further in the long run. As cellphones become more integrated into daily life and offer more functionalities, consumer preferences shift even more strongly in their favor, leading to a more significant rightward shift of the demand curve. Additionally, prices continue to adjust downward making cellphones accessible to more people thus further increasing the quantity demanded.
Equilibrium Price: The long-run equilibrium price will likely be lower than the initial price before the technological improvements due to the combined impact of the substantial increases in supply and the increase in demand. However, it may not decrease as much as it initially did because demand has also shifted to the right.
Equilibrium Quantity: The equilibrium quantity of cellphones sold will significantly increase in the long run due to the larger rightward shift in both the supply and demand curves.
The long-run increase in quantity is driven by the fact that technological advancements make cellphones better and cheaper. This encourages more people to buy them, either for the first time or as upgrades, thus resulting in an increase in quantity demanded. The demand curve might also become more elastic in the long run. Consumers adjust to the new technology and get more options within the cellphone market thus if the price of the phone goes up by a little many would switch to an alternative within the market.
The long-run price is affected by both the increase in supply (pushing prices down) and the increase in demand (pushing prices up). The final price would be lower than the initial price as the supply increase effect would be larger than the demand effect due to the technological revolution, which mainly affects supply first. Therefore, the equilibrium price is lower but higher than the intermediate price after the initial shift.
In summary, technological improvements lead to increased supply and demand in the cellphone market, ultimately resulting in lower prices and a considerably higher volume of sales in the long run.
Sample Answer
Short-Run Analysis:
Technological advancements in cellphones primarily affect the supply curve. Improvements like faster processors, better cameras, and longer battery life make it cheaper and more efficient for manufacturers to produce cellphones. This leads to a rightward shift of the supply curve.
Shift:Supply curve shifts to the right.
Shortage/Surplus: Initially, at the old equilibrium price, there's a surplus of cellphones because more are being supplied at each price point.
Equilibrium Price:The increased supply puts downward pressure on prices. The equilibrium price of cellphones decreases.