AMA INTERNATIONAL UNIVERSITY BAHRAIN
MBA PROGRAM
PMBA623 – SURVEY OF ECONOMICS
FINAL PROJECT
SET A PROJECT
1. Illustration of the supply and demand curves:
A.
A shift occurs in the demand and supply curve for laptops to the right since we assume that the demand increased less than the supply and as a result the demand and the supply curves will shift or move to the same direction. Considering that the supply is stable and the demand curve shift and the rise in the supply curve; as a result of this the quantity and price will both increase in the equilibrium. Thus we shift the supply curve to the right and maintain the demand curve. Considering the demand curve move down in equilibrium, the new one, the price will decrease and the equilibrium quantity will increase.
Since the increase in demand is low compared to the increase in supply then the increase in price is less than the reduction in the price, these decrease the new equilibrium price. Demand and supply increase result in the increase in the quantity equilibrium. Thus, the quantity rises in the new equilibrium.
As it is shown in the demonstration, D1 represent laptops demand curve, S1 showcases the laptop supply. Equilibrium is at 1. The increase in demand is smaller than the supply increase which is why we shit the demand
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Due to the increase in demand and maintaining the previous economy supply perpetual; the price increases to P’ and the supply increases which decreases the prices to $56.70. The price rise because of growth in demand is higher than the decrease in price. The price at the new equilibrium is at $56.70 and the quantity new equilibrium is 2.37 million. The price increase from the original equilibrium, the quantity falls to 2.37 million and the 2 is now the new equilibrium. As a result, the company production increases to 2.37 million in 2008 from 1.52 in the year before and the price rises to $56.70 from