Introduction Whether the issue is the price of a gallon of milk, the cost of housing, or the stock price of a Fortune 500 corporation, market prices are a central subject of study in microeconomics. Prices in product markets make up a constellation of information about what is happening in a capitalist economyand ultimately about how markets connect individuals to each other, as well as to society more generally. How prices are determined has been a focus of economists since even before Adam Smith. Ultimately, any theory of how markets and market prices work is an explanation of the ways that an economy functions and the broader social, historical, and moral implications thereof. Among these broader implications are the allocation of resources, the efficiency of production, the distribution of income and inequality, the desirability of competition, and the exercise of power. While this assignment will not be due until later in the term, you should begin step 1 (see below) now. Purpose write a report that explains the underlying causes of a price change for a product of your choosing. Formulating an explanation for the price change in terms of underlying causes will help you to understand: how economists apply their models, concepts, and logic to explain real-world phenomena; and what those models, concepts, and logic imply about how the market system works and how it fits into society more generally. Assignment Introduction Before you start writing your report you will need to do some research. While conducting your research for this assignment, be sure to review or have in mind the required reading material and your class notes on markets, price competition and non-competitive market structures, market governance, and government policy. To begin your research, choose a product that has seen a change in price over a period of time. Your product selection should be at the market level rather than an individual brand within that market. For example, you might choose the product of "smart phones" but not the iPhone 10. You will research and report on the underlying causes and effects of that change in price. For instance, your report might explain the rising price of college textbooks, housing, or certain medical treatments. Or it could address the important determinants of the price of a gallon of gasoline or a cell phone plan. Step 1: Conduct Research and Gather References Find at least two sources from reputable publicationsfor instance, the Financial Times or other news services, academic journals, or booksthat address the underlying causes of a price change in a product. Both articles should be about the same product and price change. Cite these sources in your responses to the questions below and include them in the reference section titled "References" at the end of your report. Step 2: You need to write Your Report Your report will be organized into five sections. A separate introduction section is not required. The first four sections will correspond to the four questions below, and should each be at least four to five paragraphs. Your responses to these questions may include graphical images (for instance, a supply and demand market model), but this is not a requirement. The report should be clearly written in your own words, free of typos, and spell-checked. Question 1 - Defining the Product and its Change in Price What product have you chosen and how has its price changedfor instance, by how much and over what time period? Your response here should clearly explain the product, by how much its price has changed, and over what time period (for instance, 'the price has increased by $2.50 since 2009', or 'the price fell by 20% between August and October'). You may include an image charting the price change through time, but this is not required. If you copy a chart from another source, be sure to cite that source. Question 2 - The Impact of the Price Change What has been the impact of this price change on individuals and on society as a whole? That is, who has benefited and who has been hurt, and how do your own values or the values of others affect the interpretation of this impact? Your response here should address diversity of human experience in relation to the product and the impact of the price change. Before writing your response, you may want to ask yourself: How does this product and its changing price help us to understand the way people are interconnectedeconomically, historically, and socially? How are different groups of people affected differently by this price changewho gains and who loses? Question 3 - Explaining the Price Change What is/are the most important direct cause or causes of this price change? Your response here should include at least one (and potentially all three) of the following categories: Demand-side explanations: for example, changes in income and preferences among buyers of the product, or changes in the availability or price of substitutes for the product. Supply-side explanations: for example, price competition or lack thereof, investments and changes in the markup (corporate levy), or technological improvements. Governance explanations: for example, taxes and subsidies, government regulations and law, changes in market and corporate governance norms. Question 4 - Underlying Social and Historical Causes With regard to the cause or causes of the price change described in Question 3, what are the underlying social and historical causes of those changes? Your response here should contextualize your response in Question 3, explaining the broader circumstances that led to the change or changes that directly caused the price of your product to increase or decrease. For instance, if in Question 3 you explained the price change as a result of increased demand, in this question you might explain the cultural, historical, or legal changes that ultimately caused the increase in demand. Step 3: Make your References Page The fifth section of your report will be your "References" section.