Answer to Question #2590 in Economics of Enterprise for samed

Question #2590
1. & Over the past decade, the demand for CDs has dramatically increased. What are some of the causes of this increase in demand? According to supply-and-demand theory, price should rise when demand increases. However, in recent years the average price of a CD has actually fallen. Explain this apparent contradiction between the and fact.


2. How would each of the following cases affect the market for blue jeans in the united states? Illustrate each answer with a supply and demand diagram.
I. The price of denim cloth increases.
II. A large number of immigrants arrive in united states.
III. A depression in united state causes household incomes to fall.

3. Government imposed per unit sales tax on beer sales in order to control the consumption of beer (in terms of quantity) among youngsters . with the aid of a suitable diagram evaluate the success of the above policy if demand for beer among youngsters is price inelastic.
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