For the scenarios discussed below, use supply and demand curves and a graph to analyze what will happen to both price and quantity in equilibrium given the information
available below. Graphs MUST be half a page each. When it is impossible to pin down the direction of the effect, discuss what is more likely in your opinion and why.
If you are unfamiliar with any of these companies, feel free to research them online so you know what they make and what quality levels and price tiers they are
focused on. Make sure to differentiate between movements of curves and movements on curves. For example, you could say something like this: “the supply curve moves to
the right. As a result, price decreases, and quantity supplied (and demanded) in equilibrium increases”.
You are the CEO of Walmart. Your economists inform you that they predict a recession starting next year. Analyze what you expect what will happen to the price and
quantity of a typical good sold at your stores. Discuss the location of the store as well as the demography of the neighborhood.
You are the CEO of General Motors. Your economists inform you that the price of steel is predicted to go down 5% next year, but the wages you pay are expected to go up
10%.
You are the CEO of Whole Foods. Your market research people inform you that Aldi is to open several new branches in Chicago, but not in Los Angeles. Analyze both the
Chicago market and the Los Angeles market (separately).
You are the CEO of Tiffany. Your economists inform you that they predict a recession starting next year. Analyze what you expect what will happen to the price and
quantity of a typical good sold at your stores.
You manage the CTA. Your economists predict a recession next year. Your weather experts predict a very hard, cold winter. Analyze the market for bus rides for next
winter.
You are the CEO of American Airlines. Your market research people inform you that Southwest is about to enter the Northeastern US market, where it does not currently
operate. Analyze the market for flights in the Northeast.
You are the CEO of Philip Morris. The FDA announces that cigarettes are unhealthy. Analyze the market for cigarettes. What could you do to increase profitability given
the news?
You are the CEO of Toyota. Your engineers have just developed a new robot that reduced the costs involved with manufacturing a new car by 10%. The robot is not
available to your competitors. Analyze the car sales market. Remember to differentiate between your supply and supply by other firms and show how each is affected as
well as what happened to total quantity, price, and your market share. Hint – remember that market supply is the sum of your supply and your competitors’ supply.
You are the CEO of Coca-cola. The FDA introduces a $2 per meal tax on fast-food (but not on drinks). Analyze the market for your products. It is the fast food sellers
who are obliged to pay the tax to the state.
You are the CEO of Coca-cola. The price of sugar increases. Analyze the results in both tnd Diet-Coke markets.