Before you post to this discussion board, you need to:
Search the Internet using a search engine (such as Google) for a recent article that discusses a change in the price of a good of service offered/sold by several producers/sellers, meaning that it is NOT a good or service that only one company offers, and for which there are no close substitutes in the market, as in this case one of the assumptions of our supply and demand model in Module 2 will be violated. For example, search "price increase," "price rise," "price drop," or "price decrease”. Avoid articles that refer to a large market, such as an article referring to an increase of "food" prices. Instead, focus for example on the price rise of "eggs", or "milk", as specific examples of the large food category. Also, avoid articles about the stock market. Copy the URL address of the website and post it as the first item of your answer.
In your post, you need to clearly and conciselyaddress the following. If the following point are not directly addressed, you may NOT earn any points for this assignment.
Determine the cause of the price change by reading the article. Then try to identify which of the theoretical demand or supply shifters discussed in Module 2 is the cause of the shift in demand or supply, or both. This step is important as it will ultimately affect the equilibrium price in the model. You need to state whether demand, or supply, or both, shift to the right or to the left, and why. The article should suggest the cause, such as increased popularity, higher costs of production, or something similar, and you should try to figure out if that represents an increase (shift to the right) or decrease (shift to the left) of the demand or supply curves. If the article does not suggest a cause for the price change, then you MUST find another article. It is important that the article you choose allows you to identify one or more supply or demand shifters. Otherwise, the article will not be suitable for this assignment, and you might NOT earn any points on it. Keep in mind that the "price change" in the article should be the "effect" of a change in supply or demand, and not the "cause". In other words you are NOT trying to illustrate how the law of demand or law or supply apply in the real world, but how demand shifters or supply shifters cause the equilibrium price in the model to change, and how well the supply and demand model predicts what happens to prices in the real world. This will become clear once you have completed your third step of the 3-step approach/method to changes in equilibrium, which is extensively discussed in the course materials for Module 2 (see the Practice Problems for Module 2 document containing the answer key for 5 practice problems).
Draw your graph (simply by hand, using only pen/pencil and paper) and complete your graphical analysis. While you are NOT required to show your graph, you must draw and utilize your graph in this part. In particular, state which diagram best describes the situation in your article: one in which only demand shifts, only supply shifts, or both. Then write a short paragraph stating what happens to the new equilibrium price and new equilibrium quantity in your theoretical graph, when you compare them with the original equilibrium price and original equilibrium quantity. These are your theoretical model predictions. Last, state whether your theoretical model predictions match what is stated in the article regarding the price change and possibly, the change in the quantity sold in the market. Comment to the best of your abilities on the reasons for such an outcome (if there is a good match or not).
Hints:
In a double shift situation, depending on the relative size of the shifts in demand and supply, you will find that one of the equilibrium variables either increases, decreases or stays the same, while the effect on the other equilibrium variable is certain (it either increases or decreases), when all the three possible scenarios are thoroughly analyzed.
However, in a single shift scenario, both equilibrium variables can be predicted with certainty by looking at your graph
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