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Discuss the difference between demand and quantity demanded, and analyze substitutes and

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Discuss the difference between demand and quantity demanded, and analyze substitutes and complements in light of the case as well as B200 material (reader 2). Also discuss the types of elasticity (price, income, cross elasticity) and the factors that affect demand. Provide examples within your discussion using products you are familiar with;Attachment Preview;B200A TMA02 Fall 2010.doc;B200A;TMA 02;Fall 2010;Short Case: Complementary and substitute products, and effects on;demand and quantity demanded.;Lets assume that butter and honey are complementary goods. This would;mean that an increase in the price of honey would result in a decrease in;quantity demanded for butter. The logic would seem straightforward: as a;result of a higher price for honey, less people will purchase honey and;consequently there would be less demand for butter. This would hold true if the;price increase in honey was caused by a supply shift (low supply of honey).;However, this would not necessarily be the case if the increase in the price of;honey was caused by an increase in demand for honey. If the higher price of;honey was demand induced (like if a new medical discovery found that honey;had great benefits against certain diseases) then the outcome would be a larger;quantity of honey bought at the higher price and hence, a greater demand for;butter.;The same is also relevant for substitute goods. If for example, Mobil gasoline;and TOTAL gasoline are substitutes as fuel for cars, then one would expect to;see an increase in the relative price of Mobil to result in an increase in demand;for Total. This would be true if the increase in the price of Mobil was caused;by a reduction in the supply of Mobil. If, on the other hand, the demand for;Mobil increased because of a new improved formula that cleans fuel injectors;and improves fuel efficiency. This would cause a price increase, and the;demand for Mobil would actually increase and hence customers would be;substituting away from the other product, TOTAL.;Question: Discuss the difference between demand and quantity demanded;and analyze substitutes and complements in light of the case as well as B200;material (reader 2). Also discuss the types of elasticity (price, income, cross;elasticity) and the factors that affect demand. Provide examples within your;discussion using products you are familiar with.;(100 Marks);NOTES TO STUDENTS;Cut-off date: Submit this assignment no later than 18 December 2010.;Word count: Discuss the above statement in no more than 1500 words.;Referencing: You must acknowledge all your sources of information using full;Harvard Style Referencing (in-text referencing plus list of references at the end).;Use E-library.;Plagiarism: It is very important to use your own words, Plagiarism will lead to a loss;of marks and extensive plagiarism could mean that you failed your TMA.;Answering: Your response to the question should take the form of a full essay format;divided into a number of paragraphs with introduction and conclusion without;subheadings and bullet points. Use B200 reader two chapters (Markets), the above;case, E-Library, and examples from your own experience.;Essay Guidance;Discuss concepts that you have learned from B200 module 2: Markets;(especially chapters 3 and 4). Discuss also the short case given in this TMA.;Review each chapter's learning outcomes in the B200 study guide, module;two.;Plan what you will write, and have a well organized outline.;Select and group topics and decide the order in which you intend to write;about them.;While answering the question, you should avoid descriptive writing, you are;asked to discuss a statement relying on B200 topics and your own search.;You should support your discussion by using examples from module two;chapters and study guide, as well as examples from your own country or your;own experience.

 

Paper#32146 | Written in 18-Jul-2015

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