Economic Forces

Question 1

Recently, the State of California prohibited grocery stores from providing free disposable bags to their customers. Instead, stores were required to charge a small fee of 10 cents per bag if customers wanted to buy bags from the store. Customers were encouraged to bring and use their own reusable bags. Despite the nominal charge of 10 cents per bag being so little, the large majority of consumers have adapted by bringing their own reusable bags when they go grocery shopping.

In a 2- to 3-page paper, explain how the economic concept of elasticity of demand applies to disposable grocery bags and how the concept might have been used in setting the 10-cent bag fee. Besides elasticity of demand, what other economic and noneconomic forces might have been at work in the significant reduction in the use of disposable bags in California?

Question 2

Explain law of demand, law of supply and how change in demand and change in supply apply to the market condition and discuss how price ceilings and price floors apply in the market.

Question 3

An amusement park whose customer set is made up of two markets, adults and children, has developed demand schedules. Calculate the price, quantity, and profit if: The amusement park charges a different price in the adult market. There are six questions to be answered in this assignment