1. What was the last major regulation that affected your industry? (If you're not sure, you can ask someone more knowledgeable in your firm, or conduct your own independent research via trade magazines or newspaper articles.) The last major regulation that affected my industry is taxes. 2. Did it affect prices and quantities and supply and demand? How so? It affects prices and quantities and supply and demand by increasing the cost of production, which in turn increased the prices of the goods or services we provide. This also affected the quantity of goods or services we could produce and supply. This also affected the demand by decreasing it as consumers are less willing or able to purchase our products at the higher price. 3. Did the effective regulation affect the price that could be charged? Did it create barriers to entry? Explain your understanding.
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Question 1: Please refer to Extract 1: a) Using the supply and demand model, and assuming a perfectly competitive market, how has the effect of falling commodity prices (e.g. gas, coal, corn) affected the market for newly produced heavy equipment? 1 mark b) How have the changes in the used and rental equipment markets, as described in the article, affected the market for newly produced heavy equipment? 1 mark EXTRACT 1 Mining slump hits machine makers BOB TITA Used machinery is flooding the second-hand market, piling more pain on equipment makers battling slack demand from customers that mine, move or refine commodities amid a global slump in the value of everything from coal to corn. Instead of buying a new $US500,000 bulldozer or $US300,000 excavator, many construction firms and other equipment users are renting or entering longer-term leases for machines to expand their fleets or replace worn-out equipment, dealers and analysts say. Dealers, in turn, are keeping smaller inventories of new wheel loaders, backhoes, and other machinery. That is hurting sales for Caterpillar, Volvo, Deere, and other manufacturers. Machinery gluts can be lengthy because such high-priced equipment can last a quarter-century or longer. The strong US dollar also is dampening demand from developing African and Asian markets that once snapped up used machines. "There's a lot of machinery sitting around," said Bill Yurkovic, used equipment manager for Cleveland Brothers Equipment, a Caterpillar dealer in Pennsylvania and West Virginia. Demand there for dump trucks and other large earthmoving machinery crashed along with prices for the coal and natural gas the region produces. "It's as bad as it's been in my 30 years," Mr. Yurkovic said. "A lot of renting. Not a lot of buying." With so much equipment up for grabs, used-machinery prices are down 10 percent from a year ago, Caterpillar says. Its dealers also are under pressure to keep up with price discounts on competitors' new equipment.
Akash M.
Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. In the small country of Anconia, shoes are produced in a perfectly competitive industry. The equilibrium market price for shoes is $50 per pair. Anconia does not currently trade with other countries. (a) Draw a correctly labeled graph of the shoe market in Anconia and indicate the following. (i) The equilibrium price in Anconia, labeled $50 (ii) The equilibrium quantity in Anconia, labeled QE (b) Now assume that Anconia opens its shoe market to international trade and starts trading shoes with other countries at the world price of $30 per pair. (i) On your graph in part (a), show each of the following for the shoe market in Anconia. - The world price of shoes, labeled $30 - The quantity of shoes supplied by producers in Anconia, labeled QP - The total quantity of shoes purchased by domestic consumers in Anconia, labeled QC (ii) Using labels from your graph, identify the quantity of shoes imported by Anconia. (iii) Did consumers of shoes in Anconia benefit from opening up the shoe market to trade? Explain. (iv) On your graph in part (a), show the domestic producer surplus in Anconia with trade, shaded completely. (c) Now assume that the government of Anconia places a tariff on imported shoes. Relative to the free-trade outcomes in part (b), identify whether the following would increase, decrease, or remain the same as a result of the implementation of the tariff. (i) The price of shoes in Anconia (ii) The producer surplus of domestic shoe producers in Anconia (d) Explain why a government might prefer to impose a tariff rather than an import quota. 30. Respond to all parts of the question:
Supreeta N.
In the late eighteenth century, the price of bread in New York City was controlled, set at a predetermined price above the market price. a. Draw a diagram showing the effect of the policy. Did the policy act as a price ceiling or a price floor? What kinds of inefficiencies were likely to have arisen when the controlled price of bread was above the market price? Explain in detail. One year during this period, a poor wheat harvest caused a leftward shift in the supply of bread and therefore an increase in its market price. New York bakers found that the controlled price of bread in New York was below the market price. c. Draw a diagram showing the effect of the price control on the market for bread during this one-year period. Did the policy act as a price ceiling or a price floor? d. What kinds of inefficiencies do you think occurred during this period? Explain in detail.
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