Case -1

Question 1: Following increased demand for organic dairy products and Guernsey dairy products in particular, Lakenham Creamery, a small but rapidly growing company that supplies ice cream to major stores in London and East Anglia, has initiated plans to expand its Norfolk County ice cream selections by introducing organic ice cream made entirely from imported Guernsey milk and cream. Lakenham Creamery's current workforce is not large enough to produce the new ice cream selections. As a result, Nigel Stewart, the company's Human Resource director, has taken proper measures by interviewing a large number of candidates in an attempt to increase the company's workforce by 25 percent. The company owner, Mary Hatchins, while watching the BBC News, learned that weather conditions, which involved strong winds, heavy rain, and poor crop harvests resulted in a drastic reduction in cattle feed, prompting Guernsey Dairy, the primary dairy producer in the British Channel Island of Guernsey, to suspend its production of organic milk. Mary immediately contacted Nigel to ask him to postpone the company's plans to increase the workforce.

Required:

1-Apply the dynamics of demand and supply, assess whether Mary make the right call?

2-If you were acting on Nigel behalf, what would be your response? Provide a comprehensive analysis.

Case -2

You are the manager of a firm that produces and markets a generic type of soft drink in a competitive market. In addition to the large number of generic products in your market, you also compete against major brands such as Coca-Cola and Pepsi. Suppose that, due to the successful lobbying efforts of sugar producers in the United States, Congress is going to levy a $0.50 per pound tariff on all imported raw sugarthe primary input for your product. In addition, Coke and Pepsi plan to launch an aggressive advertising campaign designed to persuade consumers that their branded products are superior to generic soft drinks.

Required:

1- How will these events impact the equilibrium price and quantity of generic soft drinks? Provide a comprehensive analysis using the applications of Demand and Supply.