Question

Consider any recent financial news on tv, internet, newspaper, etc., and comment on how the news might affect the market for a particular good. First, decide whether demand or supply or both are affected. Second, would this cause an increase or decrease in demand, supply, or both. Finally, comment on the implications for the new equilibrium quantity and price. For example. Recent calls for a strike against UBER might cause a change in the demand for UBER stock. Since the news are negative, it might be expected the demand to decrease (fewer people wanting to own the stock). Finally, the decrease in demand causes a drop in the stock price of UBER and fewer people might want to buy the stock.

Answer 1

A recent financial news on TV would be about UK and Brexit. If UK exits Brexit then the car market in UK would be affected. Brexit has caused the UK car production to fall, it's demand to fall and moreover it's prediction to manufacture in the future has also reduced. This has already resulted in the reduction of export or cars. This has affected the supply of cars in the UK market. The demand of cars has also been affected in the domestic market, as the people are unsure to buy a car because of the Brexit. People's jobs are at stake because of Brexit. Hence, people will not want to invest on Caesar this time. Hence, both the supply and demand of cars have been affected. The future prediction of car demand has also decreased due to the negative news.

The new equilibrium quantity depends on the supply and demand reduction. How much the supply and the demand has reduced, the equilibrium depends on that.