Probl

em

set

–

5

(deadline

S

unday)

Using shifts in supply and demand curves, describe a change in the industry in which

your firm operates. The change may arise from a change in costs, entry/exit of firms,

a change in consumer tastes, a change in the Macroeconomy, a change in interest

rates

, or a change in exchange rates. Label the axes, and state the geographic,

product, and time dimensions of the demand and supply curves you are drawing.

Explain what happened to industry price and quantity by making specific references

to the demand and su

pply curves. If more than one change occurred, then

decompose the change into smaller pieces so that your explanation has a step

-

by

-

step character to it. (Hint and warning: Demand and supply curves are used at the

industry level, not at the firm level.) De

scribe how your company could profitably use

the analysis.

P

roblem set

–

6

(deadline

S

unday)

Describe an important difference in the way an economist and a businessperson

might view a monopoly.

Problem set

-

7

(deadline

T

hur

sday)

To increase a company’s performance, a manager suggests that the company needs

to incre

ase the value of its product to customers. Describe three ways in which this

advice might be incorrect (Hint: Think about what else might or might not change

that affects profit.

)

Problem set – 5 (deadline Sunday)

Using shifts in supply and demand curves, describe a change in the industry in which

your firm operates. The change may arise from a change in costs, entry/exit of firms,

a change in consumer tastes, a change in the Macroeconomy, a change in interest

rates, or a change in exchange rates. Label the axes, and state the geographic,

product, and time dimensions of the demand and supply curves you are drawing.

Explain what happened to industry price and quantity by making specific references

to the demand and supply curves. If more than one change occurred, then

decompose the change into smaller pieces so that your explanation has a step-by-

step character to it. (Hint and warning: Demand and supply curves are used at the

industry level, not at the firm level.) Describe how your company could profitably use

the analysis.

Problem set – 6 (deadline Sunday)

Describe an important difference in the way an economist and a businessperson

might view a monopoly.

Problem set - 7 (deadline Thursday)

To increase a company’s performance, a manager suggests that the company needs

to increase the value of its product to customers. Describe three ways in which this

advice might be incorrect (Hint: Think about what else might or might not change

that affects profit.)