Principles of Economics Assignment Example | Topics and Well Written Essays - 750 words

Principles of Economics - Assignment Example Indeed, this article highlights critical economics points. First, Rampell (2013) appreciates that prices inversely relate to demand, and as such, increase in demand causes an increase in price of commodities. The author supports this with examples of price increase of airline tickets during Christmas, tickets for Major League Baseball during World Series and roses around Valentine’s Day. Even so, the article is more concerned with products that defy this postulate. Specifically, the author questions the decrease in prices of turkey during Thanksgiving when the increased demand dictates otherwise according to the principles of economics. The author cites government data that indicates a significant decrease in prices of turkey every November, the month of Thanksgiving when demand for turkey is high. The article raises two points to explain the observed phenomenon. First, the supply-side forces postulate argues that retailers sell â€Å"loss leaders† in anticipation that the commodities for which they sell at low prices, even at a loss, would attract customers who would then buy other commodities to compensate for the profits forfeited on such products (Rampell, 2013). Secondly, the author cites the demand-side forces argument noting that consumers tend to be more price-sensitive on commodities during peak seasons. 3. In the next three to five paragraphs, apply two of the following economic concepts (supply and demand, market structures, elasticity, and cost of production) to the key points that you highlighted in Question 2. The term demand in itself makes no sense unless qualified by price and the time during which it refers to. This explains the definition of demand by Mankiw (2014) as the quantity of goods that a consumer is willing and able to buy given the price, during a specified period of time. With regards to the case article, the period is