For the product you’ve chosen, consider economic trends (real or hypothetical) that might impact...

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For the product you’ve chosen, consider economic trends (real or hypothetical) that might impact this product. You should come up with at least two: one for supply and one for demand. Some examples that you may use:A change in preferences due to a fashion or health trendA shift in demographics due to aging populationsAn increase or decrease in the input costs (such as cost of raw materials or labor) needed to offer a productNote: Although research is not required for this step, it is encouraged. See the Supporting Materials section of this project for some recommended databases.Please note that, while this section is not checked for mastery, it is needed as a basis for the rest of your project.For each economic trend you consider,describe it according to the determinants of supply and demand. Use the determinants from the following list:Demand:Income, prices of related products, preferences, demographic characteristics, buyer expectationsSupply:Prices of factors of production, technology, returns from alternative activities, the number of sellers, seller expectations, natural eventsUsing one of the trends that you’ve described above,model the shift in supply or demand for this product. Make sure to use appropriate labels and terminology in your model.Note: To model the shift in supply or demand graphically, you may use the drawing tools in Microsoft Word, or use the graphing tool linked in the Deliverables section and take a screenshot. Alternatively, you may describe the shifts that will occur.Explain your rationale for this shift (based on the model above) using appropriate economics terminology.As you work, consider the following:The difference between a shift in supply or demand versus a shift in the quantity supplied or demandedHow the equilibrium will shiftThe firm is also interested in understanding the elasticity of price for this product within the market. Consider a rise in the price of this product anddetermine if demand is elastic or inelastic based on an application of the determinants of price elasticity of demand.For each of the determinants in the following list, consider the impact on the elasticity of demand for the product:Availability of substitutesTimeImportance in household budgetsLuxury or necessity (such as addictions or habits)The firm is considering how the price of this product might change its demand. Using your determination on elasticity,explain how a price increase would impact revenue for this product.In addition to the trends and shifts, the company is also interested in understanding possible ramifications of this product on the larger world.Discuss a potential externality of a transaction for this product.It may be positive or negative. For example:Pollution from secondhand smoke or product wasteEducation as a result of product useBacterial resistance due to overuse of antibioticsWidespread disease prevention due to vaccinations

Ca · Accepted Answer

Answer 3 
		
                                                   
As explained in previous part of the question, demand has reduced multifold due to the COVID, people have less disposable income left in their hand that is the reason as to why the demand of cars has reduced from D1 TO D2.

For the product you’ve chosen, consider economic trends (real or hypothetical) that might impact this product. You should come up with at least two: one for supply and one for demand. Some examples...

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