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Zooland Aluminum Ltd. Announced shutdowns at 4 smelters (3 in Quebec, 1 in Britain) Reduce worldwide production by 8.5 % o500 employees temporarily out of

Zooland Aluminum Ltd. Announced shutdowns at 4 smelters (3 in Quebec, 1 in Britain)

Reduce worldwide production by 8.5 %

o500 employees temporarily out of work

o200 workers in Quebec will be affected by shutdown (November and December)

Shutdowns surprised many analysts, because Quebec smelters, rank among world's lowest-cost producers

oZooland's reservoirs for hydro are to full, and co. needs to buy power from Hydro-Quebec to maintain production

Cash price of aluminum, stuck at its lowest level jumped 10% to $1,232 (US) a ton or c55/pound

Zooland's stock also went up from $1.37 to $24.25 on TSE

The graph represents some of what has been happening in the industry at the time of the article. Answer the following questions about this graph

  • What do D1 and D2 illustrate and why? (1pt)

  • What does Q1 represent? (1pt)

  • After the shift to D2, what price would be required to sell the original amount of planned production (Q1)? (1pt)

  • What part of the graph illustrates the "over-supply" or "glut"

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