Major weather events have the ability to negatively impacted large geographical areas. This is

something that most have lived through, and have find it frustrating when prices increase

and/or products and services are hard to purchase. Damage caused storms will often lead to

an increase in demand for products and services to repair the damages. Not only will a major

weather event drive up the demand for some products and services, but it also impacts those

businesses that supply those needed products and services. Some of these frustrations have

led to public outcry about price gouging. While some price gouging might exist, an analysis of

supply and demand provides answers to what is happening in the market.

In this scenario a major storm has caused large scale damage to a coastal area you are a

nursing home administrator at. The corporate auditor wants justification for the increased

cost of supplies to repair the nursing home damaged in the storm. Only one product will be

analyzed - construction screws. Complete each part of this scenario using the Excel template

provided. This will be part of your response to the auditor.

View this video for help in completing scenario 1:

Scenario 1 - Impact of Market Forces on

Supply & Demand

Table 1: Data for Scenario 1

Price

Qd

Qs

$ 6.00

0

2400

$ 5.00

400

2000

$ 4.00

800

1600

$ 3.00

1200

1200

$ 2.00

1600

800

$ 1.00

2000

400

ECON195 - Portfolio Project Directions and Rubric

3

Part A:

Begin by copying the data from

Table 1

to the Excel template. Using the data provided, insert

a chart (Scatter with straight lines and markers) in the first blank box that includes the

market supply and demand curves. The x-axis is to be labeled Quantity in Boxes and the y-axis

Price per Box. Label the equilibrium

A

. Add a legend and chart title (Part A: Market for

Construction Screws) to the chart. Once the original chart is complete, copy it into the

remaining three boxes.

Part B:

As a result of a major weather event, the demand for construction screws increases. In the

New, Qd column, add 800 to each value in the Qd column. Name the second chart Part B

(change the A to a B) and add the new demand curve to the chart. Label the new equilibrium

B

.

Part C:

As the result of the of a major weather event, the supply of construction screws decreases. In

the New Qs column, subtract 800 from each value in the Qs column. Name the third chart Part

C (change A to C) and add the new supply curve to the chart. Label the new equilibrium

C

.

Part D:

It is seldom that market conditions only impact one of the curves at a time. Name the fourth

chart Part D and add both the New Qd and New Qs to the chart. Label the new equilibrium

D.

To complete Part D, correctly add the equilibrium labels from Part A-C.