how does the graphical representation below illustrate the dynamics of directional shifts in demand relative to...

how does the graphical representation below illustrate the dynamics of directional shifts in demand relative to the factors such as changes in income, preferences, or expectations? share an example of each for reference and application for the IPad business model.

Solutions

Expert Solution

Fig1. Change in income

An IPad is a premium product demanded and desired by all people. Therefore, it can never be an inferior good. It is a normal good whose demand increases with increase in income and demand decreases with decrease in income. The effect of rightward and leftward shifts have been shown in the fig1.

Fig2. Changes in taste and preferences

Taste and preferences keep on changing for people like product design, form factor of devices etc. If people want an IPad with a modern form factor and the product is made in tandem with consumer taste and preference, the demand would increase and f the device is not according to the preference of the consumer then the demand would decrease as shown in the fig2.

Fig3. Expectations of people.

An IPad is an expensive device. If people expect the price of the device to rise in future, people would demand more now to save money in the future and if they expect the prices to fall in future, they will demand less today to save more in the future as shown in the fig3.

Rahul Sunny answered 3 months ago

Next > < Previous

Related Solutions

A _______________ is a graphical representation of how much of a good or service households will...

A _______________ is a graphical representation of how much of a good or service households will want to buy at different prices. A _______________ is a graphical representation of how much of a good or service a firm is willing to sell at some specific price. The intersection of the demand and supply curve is called _______________. This is where the quantity demanded is equalto the quantity supplied. There is a _______________ of a good or service when the quantity...

Explain, with the aid of a graphical representation, how the coefficient of determination (R2) is derived

Shifts in both Supply & Demand simultaneously. 1.Please draw three graphs to illustrate that a shift...

Shifts in both Supply & Demand simultaneously. 1.Please draw three graphs to illustrate that a shift in both S & D to the right can lead to an increase in demand; but, the impact on price is ambiguous. ( Hint: the answers depend on the magnitude of the shift of each curve. ) Please label your graph properly and use rulers while drawing the graphs. a)Show that a shift of both S & D to the right can lead to...

Part II: Graphical questions a. Using the bond supply/bond demand model, graphically illustrate and explain the...

Part II: Graphical questions a. Using the bond supply/bond demand model, graphically illustrate and explain the impact on i and q if the liquidity of stocks increased due to a new online processing option while simultaneously government reduced subsidies for capital projects by firms. The answers that posted in Chegg is not correct, please I need accurate work b. Using the loanable funds model, graphically illustrate and explain the impact on i and q resulting from an increase...

PART II: DEMAND AND SUPPLY GRAPHICAL (25 Marks) The table below shows the demand and supply...

PART II: DEMAND AND SUPPLY GRAPHICAL The table below shows the demand and supply for 1 bedroom apartments in Nanaimo. Price per Month ( $ ) Demand Supply Price per Month ( $ ) Demand Supply 400 5250 2250 600 4000 3500 440 5000 2500 640 3750 3750 480 4750 2750 680 3500 4000 520 4500 3000 720 3250 4250 560 4250 3250 760 3000 4500 Construct an accurate graphical model, on one graph, of price, demand, and supply. Illustrate...

Question 1 How does consumer moral hazard affect market equilibrium? It shifts the demand curve to...

Question 1 How does consumer moral hazard affect market equilibrium? It shifts the demand curve to the right, thereby increasing both the quantity of health care used and the price of health care. It shifts the demand curve to the right, thereby increasing the quantity of health care used, but its affect on the price of health care is ambiguous. It shifts the demand curve to the right, thereby increasing the quantity of health care used and decreasing the price...

Using graphical analysis in explaining your answer, describe a model to illustrate how the integration of...

Using graphical analysis in explaining your answer, describe a model to illustrate how the integration of production factor markets leads to a better allocation of capital and labor

Illustrate with an example how faithful representation concept/assumption may be applied to accounting for inventory.

how does disparate impact relate to proportional representation?

In the space below, use a supply and demand diagrams to illustrate the situation where demand...

In the space below, use a supply and demand diagrams to illustrate the situation where demand increases and supply also increases (at the same time). Indicate what the model predicts about the change in equilibrium price and quantity. Carefully label your diagram and explain it. (HINT: three graphs) Explain all answers fully and give concluding sentences.

Subjects