Ecom

Economics and Ethical Issues
Dana BURNBUS 508 015016*201004
April 28, 2010
Dr. Dennis Darlak

Abstract
Mrs. Acres Homemade Pies was started by Shelly Acres, whose naan passed down a family recipe for making pies. Together with her delight for cooking and her family recipe, Shelly ventured into the specialty pie business, selling to local supermarkets and family restaurants. Within a short amount of time, Mrs. Acres business began to boom in high request, resulting in an increase in staff and employment. Shelly accordingly expanded her operations which in turn increased outpution and sales. Demand for Mrs. Acres Homemade Pies is steadily on the heave and accelerating beyond what shes soon able to hand over (Ferrell, Hirt & adenosine monophosphate; Ferrell, 2009). Shelly Acres is now faced with making a vituperative decision for the future and longevity of her business. Supply, demand and expense atomic number 18 the primary factors she must consider. These factors will also be address in the short-term and long-term growth of Shellys business.

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1. Discuss what will happen to the supply, demand and price of the product in the short-term.
As it currently stands, Mrs. Acres Homemade Pies cannot supply the measuring rod demanded.



If the supply of pies remains constant and demand increases, the demand will raise the equilibrium price and equilibrium amount due to production cost (McConnell & Brue, 2008). The increase in price will thusly result in a change in quantity demanded. The change in quantity demanded is a movement from star point to another point, from one price-quantity combination to another, on a fixed demand document or demand curve (McConnell & Brue, 2008). For instance, the price of pies is currently $4.50, the equilibrium price. By moving or increasing the price to $6.50, the sellers price no longer matches what the buyer is willing to pay, therefore causing a decrease in demand. By exploring Shellys option to expand operations, supply would then meet demand, thus...If you want to get a full essay, position it on our website: Orderessay



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