A high level of understanding is demonstrated through the ability to teach others. In this
assignment you are to assume that you are writing for a high school student that needs
you to teach him or her how to analyze a market using the demand/supply model. Be
detailed, specific and clear in your double-spaced, word-processed, textual explanations
as you consider the market for �Fitbit Fitness Trackers.�
Do all the required readings for Module 1 and based on the textbook demand/supply
model of Chapter 3, answer the following in question and answer format. There is no
need to repeat the question as part of your answer � a number followed by an answer will
suffice.
1. If a company training program makes the workers that produce Fitbit more
productive, would this be reflected as a change in demand or a change in supply
in the market for Fitbit, ceteris paribus? Explain. Be sure to clearly identify a
textbook variable or determinant that is causing this change. Would this change
be an increase or decrease? Explain. Would this change result in a surplus or in a
shortage in the market for Fitbit? Explain. Given this surplus or shortage, how
will a new equilibrium be established? What do you predict will happen to the
equilibrium price and the equilibrium quantity exchanged in the market for
Fitbit? Explain.
2. Illustrate your change in #1 on a graph of the market for “Fitbit.” Label your
graph fully using the “sample graph for milk” (see that PDF) as an example. Be
sure to clearly indicate the surplus or shortage distance and what happens to
equilibrium price and equilibrium quantity exchanged on your graph using
arrows. Provide a legend as well.
3. If there is a decrease in the price of Jawbone Up, a substitute good to Fitbit, would
this be reflected as a change in demand or a change in supply in the market for
Fitbit, ceteris paribus? Explain. Be sure to clearly identify a textbook variable or
determinant that is causing this change. Would this change be an increase or
decrease? Explain. Would this change result in a surplus or in a shortage in the
market for Fitbit? Explain. Given this surplus or shortage, how will a new
equilibrium be established? What do you predict will happen to the equilibrium
price and the equilibrium quantity exchanged in the market for Fitbit? Explain.
4. Illustrate your change in #3 on a graph (yes a second one) of the market for
“Fitbit.” Label your graph fully using the “sample graph for milk” (see that PDF)
as an example. Be sure to clearly indicate the surplus or shortage distance and
what happens to equilibrium price and equilibrium quantity exchanged on your
graph using arrows. Provide a legend as well.
5. If the change in #1 and the change in #3 happened in concert (at exactly the same
time), what do you predict will happen to the equilibrium price and equilibrium
quantity exchanged of Fitbit? Explain your thinking in words (text) and
illustrate on a fully labeled graph (yes a third one!). Provide a legend for your
graph as well.
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