Show all work. Failure to do so will result in a reduction of points.
- Suppose a new iphone hits the market and its price increases to $2000.00; which creates a shortage. Also suppose that there is a $500.00 increase in the phone which further creates a shortage. Show the possibility of this bizarre market situation using a graph.
- Show a situation where a market is disequilibrium at the same price.
- You have a full-time job working for the federal government. However, because of your expertise in producing designs for the graphic design industry (ads and billboards for upscale events), you start a part-time graphic design business. You are having problems determining what a fair price should be. Once your costs are assessed you are almost in a position where you can price your product(s). What could you consider next in determining your price? HINT: THIS IS NOT A GRAPH PROBLEM.
- Show a production possibilities graph of these considerations.