Question 1
Subject:EconomicsPrice: Bought3
Question 1. Suppose we are analyzing the market for milk tea. Please use 3 steps to analyze and graphically illustrate the impact each of the following would have on demand or/and supply in the market, also show how equilibrium price and quantity have changed. (4 marks ; 0.5 mark/case) a. The price of latte, a substitute for milk tea, increases. b. The price of tea decreases. c. A better method of harvesting tea is introduced and the Surgeon General of the U.S. announces that milk tea causes acne. d. Protesting farmers dump millions of gallons of milk, causing the price of milk to rise. e. Consumer income falls because of a recession by covid 19 pandemic and milk tea is considered a normal good. f. Producers expect the price of tea to increase next month and the number of youth drink milk tea increase a lot. g. Vinamilk has a very large dairy farm, increasing milk supply and doctors think that drinking milk tea is good for health. h. The transportation of tea and milk faces many difficulties due to social isolation and the demand for milk tea has dropped sharply due to the impact of the covid 19 epidemic.
