Question

1. Choose one of the following markets to analyze: Driverless cars, Dog walkers, Steel, Entertainment streaming services, Jets, Cleaning supplies or New home construction. Identify the market in question i.e. who are the buyers and sellers. Analyze the five demand ceterus parabus conditions and the five supply ceterus parabus conditions. Give a specific hypothetical example for each condition that results in an increase or a decrease. For example if the market were video games, an increase in the salaries of graphic designers would cause the supply of video games to decrease.

Answer 1

Steel market

Type of market structure- oligopoly because few producers of steel

Buyers are consumers and goods manufacturers

Sellers are steel company owners

1.five demand ceturus paribus conditions

a.consumers preference for steel products increase,because of that demand for steel would increase.

b.if price of substitute falls,demand for steel will decrease so if price of aluminium falls,demand for steel will decrease.

C.if consumers income increases,demand for steel will increase.

d.if consumers income decreases,demand for steel decreases.

e.if consumers expect the price of steel to decrease in future,demand for steel will decrease.

2.five supply ceterus paribus conditions

a.if raw materials cost of steel increases,supply of steel decreases

b.if taxes are increased,supply of steel decreases

c.if technology increases,supply of steel increases

d.if taxes are decreased,supply of steel increases.

e.if technology decreases,supply of steel decreases.