Law of supply and demand:

You have been hired as an economic consultant to a firm that is trying figure out how to set their prices.

1.Identify the firm's major trouble areas and misconceptions.

2.using economic terms, explain the problems or the flawed logic in the situation

3.Evaluate the flawed decision or action and offer a strategic plan

4.Demonstrate a graph and change in manipulation( increase, decrease, change price.)

FIRM 3 Dear Economist, My name is Cal Qulator. I run a mathematics tutoring business, but I failed my economics classes. I'm not complaining, but I am confused about something that's going on with my business right now. Let me start from the beginning. When I first opened my business, the going rate for tutoring was $20. For that I was willing to tutor 2 students a week. I advertised that for $40 I'd take 4 students and for $60 I'd take 6 students a week. Surprisingly. even at $60. I had 6 students. However, when I switched to $80 - thinking I could get 8 students, 2 of my students quit because they couldn't afford it and I had extra spaces. Why did that happen? Anyway. I decided to go back to $60 and picked up those 2 students again. Recently, I inherited a large sum of money and didn't need to work anymore. I still wanted to tutor so I said I'll offer 8 spots a week and NO MORE. Strangely, even though I was still charging $60, I filled up my remaining two spots AND had people calling wanting more spots. Apparently, this has something to do with this new math curriculum I guess. I only have room in my schedule for 8 students and that's it, so, like a good capitalist I increased my price to $90 and all 8 spots filled. What's going on now that wasn't before? Confused, Cal Qulator