ch3 Graded discussion 3 points possible You work at a store

ch3 Graded discussion. 3 points possible. You work at a store and during March selling 30 bags of charcoal per week at $8 each. The charcoal company has a promotion so charcoal goes on sale for $6 a bag and you sell 50 for each week in April. The sale ends in May and sales return to 30 bags for $8 each, but in June a spell of sunny weather causes 40 bags at the normal $8 price to be sold each week. I thought for demanders to want more, price had to be dropped? In both April and June there was more quantity demanded, which month of the two also had more demand? Your charcoal supplier delivers 30 bags each week that are sold for $8 each. A new floor manager requires more bags of charcoal, 50 immediately. He also mentions that a $7 price would be better. Will your supplier suddenly deliver more or less bags for $7 each? Finally if your supplier has more inspections at his facility will he continue to offer bags at the regular $8 price and 30 quantity? If not, then at what P, Q?

Solution

1.
In the month of June, there will be more demand. Since there are sunny weather and demand curve shifts to the right at the same price of $8. So, there is a genuine increase in demand in the month of June. In the month of April, the 40 units are sold due to the lower price.
2.
The supplier needs to increase the capacity and bring additional capital to deliver the 50 bags. These input factors are fixed in the short run. So, the suppliers will not be able to deliver these demands in the short run.
Here, the supplier will analyze the full capacity and accordingly try to supply bags of charcoal in the short run. Price can be $7 if it gives an increase in profit. Otherwise, the price will remain same that is $8 per bag of charcoal.
3.
With regular inspection, increase in capacity and more number of shifts per day, the supplier can produce the necessary quantity that is 50 bags of charcoal at a price of $7 per bag. Though, it is the demand created by the company, that will decide the supply. So, the supplier can continue with the old terms of 30 bags of charcoal and price of $8 per bag.