...Introduction The paper responds to the questions posed in section titled “Mrs. Acres Homemade Pies” at the end of Chapter 1. Shelly Acres, a founder of the company, faces the dilemma in producing homemade pies. Mrs. Acres Homemade Pies struggles to keep up with demand. Question 1: Discuss What Will Happen to Supply, Demand and Price in the Short Term. Supply is a various amount of product that producers are willing or are able to produce for selling at different prices at a specific time. In our case supply is an amount of pies Shelly Acres’ company, Mrs. Acres Homemade Pies produces. In the first month of the business she sold 2000 pies. Following month amount of sold pies rose to 8000. Demand is a various amount of product that buyers are willing or are able to purchase at different prices at a specific time. In our case, demand for Mrs. Acres’ homemade pies is rising. Good quality product and a reasonable price of pies caused rising demand. It continues accelerating beyond what Shelly can supply. The most of the time when company produces a high quality product in reasonable price, demand for this product will increase. This is happening to Shelly Acres’ business. In short term, demand will keep rising. Also, the necessity of increasing supply will accrue. In the short term the price for pies needs to stay the same, in order to keep regular customers. Therefore, Mrs. Acres’ decision to hire more employees is a right move. This will help to manage supply increase in short...
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...homemade pies and soft drinks. Mrs. Acres Homemade Pies is small business that produces specialty pies to local supermarkets and select family restaurants. This company is growing rapidly in profits and employees (Ferrell, 2009). I am going to analyze the supply and demand for this company along with pointing out challenges Mrs. Acres should consider in managing the growth of her business. The next business that I will discuss is a soft drink company that operates in a monopolistic competition market. Monopolistic competition exists when multiple businesses are selling the same goods with very small differences (Ferrell, 2009). I will discuss the economic factors needed to operate this type of business and identify how each factor could give the business a competitive advantage. Mrs. Acres Homemade Pies Mrs. Shelly Acres love for cooking motivated her to start her own business called Mrs. Acres Homemade Pies. Mrs. Acres had taken her grandmother’s homemade pie recipe and turned it into a successful pie business. Mrs. Acres sells her pies to local supermarkets and select family restaurants for $4.50 each (Ferrell, 2009). During the first six months, Mrs. Acres produced 2000 pies each month. Her success comes from three productive part time employees who produced a quality product and whom are motivated by incentives as well as their vested interest of being a part of a successful new business (Ferrell, 2009). Supply and Demand for Homemade Pies Mrs. Acres...
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...The paper responds to the questions posed in section titled “Mrs. Acres Homemade Pies” at the end of Chapter 1. Shelly Acres, a founder of the company, faces the dilemma in producing homemade pies. Mrs. Acres Homemade Pies struggles to keep up with demand. Question 1: Discuss What Will Happen to Supply, Demand and Price in the Short Term. Supply is a various amount of product that producers are willing or are able to produce for selling at different prices at a specific time. In our case supply is an amount of pies Shelly Acres’ company, Mrs. Acres Homemade Pies produces. In the first month of the business she sold 2000 pies. Following month amount of sold pies rose to 8000. Demand is a various amount of product that buyers are willing or are able to purchase at different prices at a specific time. In our case, demand for Mrs. Acres’ homemade pies is rising. Good quality product and a reasonable price of pies caused rising demand. It continues accelerating beyond what Shelly can supply. The most of the time when company produces a high quality product in reasonable price, demand for this product will increase. This is happening to Shelly Acres’ business. In short term, demand will keep rising. Also, the necessity of increasing supply will accrue. In the short term the price for pies needs to stay the same, in order to keep regular customers. Therefore, Mrs. Acres’ decision to hire more employees is a right move. This will...
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...term for Mrs. Acres Homemade Pies if Shelly does not hire more staff or expand her current production will be she will not be able to keep up the amount of orders, demand, which she is currently receiving for her product. This is not necessarily a bad situation for the company to be experiencing. As the demand for the product increases Mrs. Acres Homemade Pies will be able to raise the price of the product to also offset the cost of hiring more staff and expanding production the production facilities in order to keep up with the demand of the product. In the short term Shelly needs to heavily consider raising the price of the pies to so that she can than afford to expand and keep production of the product under her control. The success of Mrs. Acres Homemade Pies is based in that it is not like your typically massed produced items that will sacrifice quality to keep the cost down. It would appear in this situation that part of the attraction of the product is the fact that it is of a better quality which is driving the demand of the consumer for the product. As we have discussed in previous discussions the consumer will dictate how much they will spend for a product which in turn will also create part of the demand as well. In conclusion in the short term she should raise the price to help offset the eventual cost of expanding the business. 2. Discuss what will happen to supply, demand, and price in the long term. In the long term if Mrs. Acres Homemade Pies does not...
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...Given the business situation of Mrs. Acres Homemade Pies (p.30) and using the economic concepts of supply and demand, explain: Discuss what you think will happen to the supply, demand, and price of the product in the short-term: Upon reviewing Mrs. Acres’ situation on page 30, there is a limited amount of information given. However, with the information we do know, Mrs. Acres can currently produce 8,000 pies a month with a full-time staff of 4 employees. In this circumstance, the quantity Mrs. Acres is able (willing) to supply and the current price of $4.50 that the consumer is willing to spend is known as the equilibrium price. In the short-term, given the above facts, with there being a max that can be produced, there will be no effect on supply. Mrs. Acres cannot produce anymore than the 8,000 pies as stated above. At the maximum number of pies that can be made, supply is limited and does not change. Since the current supply of pies is constant, demand will most likely increase. An increase in demand will raise both the equilibrium price and equilibrium quantity, however will not have an effect on the actual price of the pies. 1. Discuss what you think will happen to the supply, demand, and price of the product in the long-term: In the long-term, Mrs. Acres may decide to expand both her staff and facility. If this is done she can produce more than the 8,000 pies. This will increase the supply she can produce, causing a drop in the equilibrium...
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...(Background of Mrs. Acres Pies) Mrs. Acres Homemade Pies derived from Shelly Acres whose grandmother gave her a family recipe for making pies. Shelly Acres loved to cook so she decided to start her own business called Mrs. Acres Homemade pies. The company produced specialty pies and sold them in local supermarkets and selected family restaurants. In the first six months Shelly Acres and three part time employees sold 2,000 pies for $4.50 each, netting $1.50 profit per pie. The business was so successful they could not keep up with demand. In order to meet demand Shelly Acres had to expand operations, borrow money, and increase staff to four full-time employees. Production and sales of the homemade pies increased to 8,000 pies per month and profits increased to $12,000 per month. Shelly Acres’ homemade pies continued to increase beyond what she could supply. Now Shelly has the dilemma of making a decision of how she should proceed with her company in the short run and long run to continue to make profits. Short-Term Supply, Demand and Price In the short run with supply staying constant and demand increasing. Shelly Acres will have to make a decision whether to increase price to maintain supply and demand. With an increase in demand in pies will raise both the equilibrium price and equilibrium quality. In the short run Shelly Acres has expanded her operations, borrowed money, and increased her staff in order to keep up with demand. In the short term of things Shelly Acres has made...
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...the pies is based on the demand—the idea that if the price of doing something goes up, then people will want to consume less of it, and vice versa. The ‘something’ has to be good and not bad. Weeds will constantly go up in supply and continue to grow, but nobody wants them, and therefore the supply means nothing. The quantity demanded equals the quantity supplied. In the case of Mrs. Acres Homemade Pies, the supply of pies will increase because the number of consumers has increased, therefore increasing demand. The price of the product will stay the same, because the expansion to provide more staff and use of the facility will bring in more revenue. Discuss what you think will happen to the supply, demand, and price of the product in the long-term. In the long-term, based on the success rate of Mrs. Acres Homemade Pies, I think the supply will continue to rise if the demand continues to rise as well. Given the information, the pies continued to sell and the profit went up for Mrs. Acres—even though the cost of expansion to produce more pies increased. Should the number of consumers continue to increase, the demand for the pies will go up. The makers of the pies will need to continue to increase in numbers, therefore increasing the supply as well. To increase the growth of making the pies, the cost will go up. Therefore, the price of the pies for the consumer will rise. If the potential for profit increases in the long-term, Mrs. Acre will continue to supply more pies while...
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...Mrs. Acres Homemade Pies Business 508 Professor Jack McCaffery Summer 2010 Rosie Wright BUS508 Assignment #1 1. Choose your company or service for your business proposal. It is not to be a franchise (McDonald’s). I would like to complete my business proposal on the company I work for; the name of the company is “Campus Crest Communities”. Campus Crest builds student housing across the United States. Their corporate office is located in South Park, they have 29 properties. 2. Analyze the situations below, complete the actions, and prepare a 3-4 page report with your conclusions: o Given the business situation of Mrs. Acres Homemade Pies (p. 30) and using the economic concepts of supply and demand, explain 1. Discuss what you think will happen to the supply, demand, and price of the product in the short-term; 2. Discuss what you think will happen to supply, demand, and price of the product in the long-term. 3. Explain why you think supply, demand, or equilibrium price will be different, if at all, in the short-term and the long-term. Mrs. Acres Homemade Pies Discuss what you think will happen to the supply, demand and price of the product in the short-term Mrs. Acre’s homemade pies are very successfully within her local supermarkets and a few family restaurants. Although the company’s success is driven by the quality of the product and the incentives provided for her employees. It’s very important that we pay attention...
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...Ethical Issues Given the business situation of Mrs. Acres Homemade Pies and using the economic concepts of supply and demand, explain * Discuss what you think will happen to the supply, demand and price of the product in the short-term; * Discuss what you think will happen to the supply, demand and price of the product in the long-term. * Explain why you think supply, demand or equilibrium price will be different, if at all¸ in the short-term and long-term. I want to begin sharing my findings with the definition of supply and demand. Supply is defined as the number of products, goods and services that businesses are willing to sell at different prices at a specific time (McGraw-Hill p. 13). Demand is the number of goods and services that consumers are willing to buy at different prices at a specific time (McGraw-Hill p.13). Mrs. Acres Homemade Pies started out successful which caused an increase in demand for the product. In the short-term, the supply of the product can be increased to meet the demand. Shelly had already taken the necessary steps to meet the rising demand of her product, by expanding operations and borrowing money in order to increase her staff. In order to meet the increasing demand in the short-term, Shelly could consider another expansion and find the financial means to increase her staff so she will be able to keep up the supply of the product. I think the price of Shelly’s pies will increase in the short-term, causing the demand...
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...short-term. Since the demand for the pie is high, the price of the pie will go up. Also, since more people are willing to pay for it. The demand and supply for the pie will go up also, simply because the people want them and the price is what they can afford to pay for it. Consequently, the rise in price prompt more pies to be supplied as supply relationship shows that the higher price, the higher the quantity supplied (Ferrell, O.C., Hirt, G., & Ferrell, L. (2009). Producers supply more at a higher price and selling a higher quantity at higher price increases revenue (McConnell, C., & Bruce, S. (2008). 2. Discuss what you think will happen to supply, demand and price of the product in the long- term. In the long term, if the demand for the pie goes down, the price as well will go down. That is to say all else equal, as price falls, the quantity demanded rises, and as price rises, the quantity demanded falls which affect the amount purchased. For instance, If new style of pie comes out and everyone wants the new one, the demand for the old pie will drop, thereby forcing the supply to drop too (McConnell, C., & Bruce, S. (2008). Mrs. Acres will have to do something in order to meet the long term levels of demand such as. (a) Tastes: A favorable change in consumer tastes for a product brings a change that makes the product more desirable. That is to say that an increased taste in a product increases its demand, thereby shifting the demand curve to the right...
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...Explain and demonstrate the relationship between supply and demand for Mrs. Acres Homemade Pies. Shelly can supply 2000 pies each month for $4.5 each, netting $1.5 profit per pie with three part-time employees, however the demand is higher than what she can do, so eventually Shelly expanded her operations, borrowing money and increasing staff to four full-time employees. The production time increase to 8000 pies per month with profit soared to $12,000 per month. As per the chart showed within only six months the demands increased 4 times, and it promises to increase more in the next quarter. It brings challenges to Shelly to consider on these following three options: 1- Maintain current production levels and raise prices; 2- Expand the facility and staff while maintaining the current price; 3- Contract the production of the pies to a national restaurant chain, giving Shelly a percentage of profits with minimal involvement. Each options have particular challenge that She should consider seriously, the first option seam the best choice because it will help her to increase profit and do not cost more expense on employees or facility, however it will minimize her market segment, when the price raising only the high class can buy pie and other middle or lower class cannot then it will leading to supply over than the demand. Or another case when she increase the price then she cannot competitive with others. On the second option, It’s seem reasonable one because when...
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...goods and services – that businesses are willing to sell at different prices at a specific time. (Ferrell, Hirt, & Ferrell, 2009) Shelly the owner of Mrs. Acres Homemade Pies is facing the risk of not being able to meet the demand for her homemade pies. The demand for her pies has gone from 8,000 pies a month to 12000 pies per month. According to the text Shelly has three choices: 1. Maintain current production levels and raise prices, 2. Expand the facility and staff while maintaining the current prices, or 3. Contract the production of the pies to a national restaurant chain, giving Shelly a percentage of profits with minimal involvement. (Ferrell, Hirt, & Ferrell, 2009) Let’s explore each of Shelly’s options. Option one: Maintain current production levels and raise prices. Per the law of supply and demand, the higher the price of the product the lower the demand for the product. Consumers naturally avoid buying products when the costs go up. Option two: Expand the facility and staff while maintaining the current prices. Option two is an ideal option for Shelly. Seeking a loan from a banking institution would allow Shelly to hire additional staff, while keeping the pie prices the same. By hiring additional staff she will be able to produce more pies and bring in more money. Option three: Contract the production of the pies to a national restaurant chain, giving Shelly a percentage of profits with minimal involvement. Depending on the percentage that Shelly will be able to...
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...The Central Problem of Economics Needs and Wants Needs are the things we can’t survive without. They are necessities of life e.g. food, clothing, shelter, water, basic wealth and basic education. Wants are the things we desire to have or own but we can survive without them e.g. cell phones, TVs, oars, radios, entertainment etc. Our want are unlimited and we never seem to be satisfied with what we have. It is people’s wants rather than their needs we provide the motive for economic activity. The economic resources that are available to satisfy our wants are limited. These resources are called factors of production which are : Land (Natural Resources) Land refer to natural resources over which people have power of disposal and of which may be used to yield income/money e.g. farming and building land, forests, mineral deposits, air, seas, oceans, vegetation, fisheries. The reward for land is rent. Labour Labour is human effort – physical or mental which is directed to the product of goods and services. Reward for labour is wages/salary. Capital Is money and all man-made assets used in the production of goods and services e.g. money, machinery, factories, delivery vans etc. Reward for capital is interest. Enterprise Land, labour and capital on their own will not produce anything. There must be a person or people who will organise the 3 factors of production so that production can take place. Whoever takes these decisions and consequent risks is known as the entrepreneur...
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...Abey/M abhorred abhorrence/MS abhorrent/Y abhorrer/M abhorring abhor/S abidance/MS abide/JGSR abider/M abiding/Y Abidjan/M Abie/M Abigael/M Abigail/M Abigale/M Abilene/M ability/IMES abjection/MS abjectness/SM abject/SGPDY abjuration/SM abjuratory abjurer/M abjure/ZGSRD ablate/VGNSDX ablation/M ablative/SY ablaze abler/E ables/E ablest able/U abloom ablution/MS Ab/M ABM/S abnegate/NGSDX abnegation/M Abner/M abnormality/SM abnormal/SY aboard abode/GMDS abolisher/M abolish/LZRSDG abolishment/MS abolitionism/SM abolitionist/SM abolition/SM abominable abominably abominate/XSDGN abomination/M aboriginal/YS aborigine/SM Aborigine/SM aborning abortionist/MS abortion/MS abortiveness/M abortive/PY abort/SRDVG Abo/SM! abound/GDS about/S aboveboard aboveground above/S abracadabra/S abrader/M abrade/SRDG...
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...Midterm Practice Exam Fall 2012 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) To arbitrage a price difference between two markets, you should: 1) _______ A) buy in the low-price market and sell in the high-price market. B) sell in both markets to capture a lower average "market price." C) sell in the low-price market and buy in the high-price market. D) none of the above 2) Which price index published by the US federal government represents wholesale price changes? A) Producer Price Index B) Dow-Jones Industrial Average C) GDP deflator D) Consumer Price Index 2) _______ 3) Although the U. S. airline industry has only a relatively small number of sellers, the market is nevertheless highly competitive. The reason is that: 3) _______ A) most airline routes are served by relatively many sellers. B) due to fierce competition, no firm has significant control over the quantity supplied. C) the number of buyers is very large. D) due to fierce competition, no firm has significant control over prices. 4) Use the following two statements to answer this question: I. Economic theories are developed to explain observed phenomena by deducing from a set of basic rules and assumptions. II. Economic theories use value judgments to determine which people ought to pay more taxes. 4) _______ A) I is true, and II is false. C) I is false, and II is true. B) Both I and II are false. D) Both I and II are true. 5) What does it mean when...
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