Question

There are 2 sections for this Unit: Supply and Demand and Elasticity of Demand

Supply and Demand section of your paper, you’ll need to do the following for Ford Motor Company:

1. Effectively evaluate trends in demand over time

2. Explain the impact the demand trends have on the industry and the firm in detail

3. Analyze information and data related to the demand and supply for the firm’s product(s)

4. Use the information and data on supply and demand to support a recommendation (or recommendations) for the firm’s actions

5. Include a graphical representation of data and information using the last 5 years of company sales data is a great choice, as shown in example below)

6. Use concrete examples in your analysis (in the example below you’ll notice a discussion of demand in China and of the supply of cocoa)

Answer 1

To evaluate demand trends for Ford Motor Company, analyze sales data, graph demand and supply curves, and consider economic changes and elasticity. Graphical representation and concrete examples help support recommendations for the firm's future actions.

Step-by-step explanation:

To analyze trends in demand over time for Ford Motor Company, one would start by evaluating past sales data to establish a baseline for demand. Understanding the law of demand and its slope allows us to graph the demand curve showing the relationship between price and quantity demanded. Similarly, the law of supply, which has a positive slope, helps graph the supply curve, depicting the relationship between price and quantity supplied.

When evaluating how economic changes affect demand or supply, we factor in shift variables that can either increase or decrease demand or supply at all price levels. For instance, a rise in consumers' income may boost demand for new cars, shifting the demand curve to the right. Similarly, advancements in manufacturing technology might increase supply, shifting the supply curve to the right. The intersection of these curves determines the equilibrium price and quantity.

Using the last five years of company sales data, one can create a graphical representation to show these trends. With concrete examples like demand shifts in various markets (like China) or supply influences (like material costs), the graphs can illustrate how these factors have historically influenced the company's sales figures.

Analyzing the price elasticity of demand is crucial since it affects the company’s revenue. Elasticity measures how responsive the quantity demanded or supplied is to price changes. If the demand for Ford's cars is elastic, significant price changes may result in considerable changes in quantity demanded, affecting revenues. Predicting how short-run and long-run changes in elasticity affect equilibrium assists in making recommendations for future actions by the firm, including pricing strategies or market expansion.