Exercise on Supply and Demand Analysis

Instructions

We have a certain commodity, “100% Pinoy Laptop”, whose market we are going to analyze. Assume that exogenous forces are equal in magnitude, and S-D curves are unitary elastic. Given a certain event/scenario, analyze the curve/s affected, shifts/or movements and the direction Effect to equil price (P*) and equil quantity

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Prices of optical drives suddenly increase. A new market-standard operating system is released to the market but costs at least 50% higher than the previous edition. News spread that local laptops were contaminated with melamine. Video chatting and internet-on-the-go becomes a fad.

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Taiwanese laptop manufacturers were permitted to enter the Philippine market Average desktop computer prices have plunged to all time lows. New taxes were imposed to laptops sales (per unit tax). A recession/economic downturn causes the income of consumers to decline AND causes the prices of laptop parts to increase

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Biggest local laptop manufacturer suddenly becomes bankrupt AND the government gives subsidy to consumers to purchase “educational and computer-literacy” related goods. New production technologies were adopted by local laptop manufacturer AND prices of inputs in the production of desktop computers decline significantly. Assume that the supply curve is perfectly

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