Company Analysis Supply and Demand

Briefly list and elaborate on the factors that will be affecting the demand for the following
products in the next several years. Do you think these factors will cause the demand to in-
crease or decrease?
a. Convenience foods (sold in food shops and supermarkets)
b. Products purchased on the Internet
c. Fax machines
d. Digital cameras
e. DVDs rented from retail outlets
f. Pay-per-view television programing
g. Airline travel within the United States; airline travel within Europe
h. Gasoline
Briefly list and elaborate on the factors that will be affecting the supply of the following
products in the next several years. Do you think these factors will cause the supply to in-
crease or decrease?
a. Crude oil
b. Beef
c. Computer memory chips
d. Hotel rooms
e. Fast food outlets in emerging markets
f. Credit cards issued by financial institutions
g. Laptop computers
h. PC servers

Joy’s Frozen Yogurt shops have enjoyed rapid growth in northeastern states in recent years. From
the analysis of Joy’s various outlets, it was found that the demand curve follows this pattern:
Q = 200 – 300P + 120I + 65T – 250Ac + 400Aj
where Q = number of cups served per week
P = average price paid for each cup
I = per capita income in the given market (thousands)
T = average outdoor temperature
Ac = competition’s monthly advertising expenditures (thousands)
Aj = Joy’s own monthly advertising expenditures (thousands)
One of the outlets has the following conditions: P = 1.50, I = 10, T = 60, Ac = 15, Aj = 10.
a. Estimate the number of cups served per week by this outlet. Also determine the outlet’s
demand curve.
b. What would be the effect of a $5,000 increase in the competitor’s advertising expendi-
ture? Illustrate the effect on the outlet’s demand curve.
c. What would Joy’s advertising expenditure have to be to counteract this effect?
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