Junior Cycle Business Studies Economic Resources: Sam, a former Lohan Ltd employee

Question

Sam, a former Lohan Ltd employee secured a job as a buyer of electrical goods for resale for an electrical retailer. As a buyer of stock for resale, they need to project demand for various products to ensure that the store has the correct quantity to meet consumer demand.

(i) Use the information in the table below to draw the demand and supply curves for the Playstation 5 (PSS).

| Price          | Quantity Demanded (000's units) | Quantity Supplied (000's units) |
|----------------|----------------------------------|----------------------------------|
| €300           | 1,000                            | 200                              |
| €350           | 800                              | 400                              |
| €400           | 600                              | 600                              |
| €450           | 400                              | 800                              |
| €500           | 200                              | 1,000                            |

(ii) Use your diagram to identify the equilibrium price and equilibrium quantity.

Write your answers in the table below.

Equilibrium Price of the PSS

Equilibrium Quantity of the PSS

(iii) The price of substitute goods and complementary goods are factors that affect the level of demand for a product.

Indicate whether the following items are substitutes for or complimentary to a PSS by placing a tick (✓) in the correct box.

|                | Substitute  | Complimentary |
|----------------|-------------|---------------|
| Xbox           |             |               |
| PSS Controller |             |               |
| Headset        |             |               |
| Gaming chair   |             |               |

(iv) When demand for a product remains high despite limited supply, consumers often turn to the black market, also known as the shadow economy.

Indicate which of the following statements are true or false by placing a tick (✓) in the correct box.

| Statement                                            | True | False |
|-----------------------------------------------------|------|-------|
| Participation in the black market is illegal        |      |       |
| The black market is beneficial for businesses in Ireland |      |       |

Sam, a former Lohan Ltd employee secured a job as a buyer of electrical goods for resale for an electrical retailer - Junior Cycle Business Studies - Question (c) - 2022

Worked Solution & Example Answer:Sam, a former Lohan Ltd employee secured a job as a buyer of electrical goods for resale for an electrical retailer - Junior Cycle Business Studies - Question (c) - 2022

Use the information in the table below to draw the demand and supply curves for the Playstation 5 (PSS).

Use your diagram to identify the equilibrium price and equilibrium quantity.

The price of substitute goods and complementary goods are factors that affect the level of demand for a product.

When demand for a product remains high despite limited supply, consumers often turn to the black market.

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Statement	True	False
Participation in the black market is illegal	✓
The black market is beneficial for businesses in Ireland		✓