Barks Computer Screens Case: a Market Analysis

Running head BARKS ready reckoner SCREENS CASE Barks electronic computer Screens Case A Market Analysis Barks Computer Screens Case A Market Analysis A foodstuff compendium is a key component of a business plan and should be conducted every few years due to market and intersection changes. angiotensin converting enzyme important aspect is identifying the supply and gather up of a crossway in the target market. The supply flex is a positive sloping curve because as the price step-ups so does the quantity of reaping. The demand curve is a negative sloping curve because as the price increases the demand for the product decreases (Hirschey, 2012).Changes can occur to both curves as changes in the market and economy take place. This will cause the curves to shift either to the left or the right. The supply curve is affected by changes in the economy such(prenominal) as an increase in the prices of material or a congenital disaster that would prohibit supply of product. The dem and curve is affected by changes in population income, economic outlook, government spending, and real interest pass judgment (McBride, 2008). In the Barks Computer Screens Case, Barks has hired me as a consultant and provides the results of his market analysis.He has found that the functions for supply and demand in his market ar Qd = 157 35P + 12. 5Pw + 0. 1Y and Qs = cxx + 75P 30Pw + 13PL + 12R. Where Qd = Demand, Qs = Supply, Pw = Average price of Wides, Y = Income in his market, PL = Price of labor, and R = Is the just humidity level measured in hums. I have fabricated the quantities demanded and supplied are a function of price and applied the following conditions Pw = $6. 00, Y = $1,600. 00, PL = $9. 00, and R = 25. Demand Qd = 157 35P + 12. 5Pw + 0. 1Y = 157 35P + 12. (6) + 0. 1(1600) = 157 35P + 75 + 160 = 392 35P. Supply Qs = 120 + 75P 30Pw + 13PL + 12R = -120 + 75P 30(6) + 13(9) + 12(25) = -120 +75P clxxx + 117 + 300 = 117 + 75R. The following price conditi ons were used to determine supply and demand market conditions $1. 75, $2. 10, and $2. 70. Qd = 392 35P = 392 35(1. 75) = 392 61. 25 = 330. 75. The same equation was used for the other twain prices to determine quantities demanded at each price. At $2. 10 the Qd is 318. 50 and at $2. 70 the Qd is 297. 50. Qs = 117 + 75P = 117 + 75(1. 5) = 117 + 131. 25 = 248. 25. The same equation was used for the other two prices to determine quantities supplied at each price. At $2. 10 the Qs is 274. 50 and at $2. 70 the Qs is 319. 50. The following graph illustrates the supply and demand curve to resound my findings. As you can see on the above graph, Qd and Qs intersect at a point. This point is when market correspondence is met. Market equipoise describes a condition of perfect balance in the quantity demanded and the quantity supplied at a given price (Hirschey, 2012).To determine equilibrium price, I make up the Qd equation equal to the Qs equation and solved for P (price) 392 35P = 117 + 75P, 275 35P = 75P, 275 = 110P, 2. 5 = P. residue price is $2. 50. To find equilibrium quantity, use P = 2. 50 in either Qd or Qs equation 392 35P = 392 35(2. 50) = 392 87. 50 = 304. 50. Equilibrium quantity is 304. 50. The equilibrium price and quantity determines paucity or surplus. A surplus of product occurs when actual price is greater than the equilibrium price. A shortage of product occurs when actual price is less than the equilibrium price (McBride, 2008).Based on an equilibrium quantity of 304. 50 the only time there will non be a surplus or a shortage is when they are priced at $2. 50. When Wides are priced at $1. 75, there will be a surplus of 26. 25 screens. At $2. 10, there will be a surplus of 14. At $2. 70, there will be a shortage of 7. My recommendation is to price the Wides at $2. 50. Having a surplus builds inventory entirely eventually decreases market prices and product output, whereas a shortage can increase market prices and create a push on pr oduction.At equilibrium, revenue is generated without a change in price or quantity produced (Hirschey, 2012). References Hirschey, M. (2012). Fundamentals of managerial Economics, 9th ed. (9th ed). South Western Educational Publishing. Retrieved from http//digitalbookshelf. southuniversity. edu/books/1111439907/id/ch4 McBride, C. (2008). Supply & Demand Analysis Chron. com. Retrieved from http//smallbusiness. chron. com/supply-demand-analysis-727. hypertext mark-up language