J. 1 (1111.5. ECON 100 Fall 2021 Assignment 3: Law of Demand Answer the following questions. You may turn in a typed document or a picture of a handwritten document. Just make sure the handwriting and picture are legible. To draw the demand curve, you may use the drawing tools in your PDF or Word Processing program, plot the numbers in Excel [be sure to use the Scatterplot with Smooth Lina; type of Chart), or print out your assignment and draw the graph by hand. 1. (2 points) In class, we derived the market demand for Tim Horton's coffee (assuming the market is only our class). Using that demonstration, explain how the market demand curve is determined. 2. (3 points) Explain why the market demand curve for Tim Horton's coffee is downward sloping. Be sure to explain the income effect and substitution eect and how it relates to the Tim Horton's example. 3. (1 point) How many movies do you see in a year at the movie theatre? The current price of a movie ticket is $15.00 per movie. How many would you go to see if a movie costs $1, $5, $10, $15, $20, $30, or $50? Fill in the second column of the table below with your answers. Prices You Friend 1 Friend 2 Friend 3 Friend 4 Friend 5 Total 4. (6 points) Ask ve friends or family members or classmates how many movies they would go see if a movie costs $1, $5, $10, $15, $20, $30, or $50. For each friend ll in a column of the table above. The information from Friend 1 goes in the third column, the information from Friend 2 goes in the fourth column and so on. Total up what you and ve friends are willing to buy at each price in the last column of the table above. 5. (3 points) Plot the prices and the total quantities from the table you created in question three and four. Be sure to label the axes with prices and quantities. Next connect the points with a line. Label this line demand. Price Quantity 6. (2 points) For 2 bonus XP, what is the impact of subscription services like Netix on the demand for movie theatre tickets? How does it change the demand curve (graph)? 7. (6 points) For the product and company that you chose in Level 1, please answer the following 1. Explain the income effect as it relates to your product. 2. Explain the substitution effect as it relates to your product. 3. In Level 1 you set a price for your product. What do you think most of the customers would be willing to pay? Is that the same price as in Level 1'? Explain why or why not. 8. (2 points) For 2 bonus XP, what is the impact of consumer preference / brand loyalty on market power (ability of consumers v producers to inuence price)
