BLAW 1002 Market and Legal Frameworks- demonstrate the change in the market cond

Task:

1. Illustrate using an appropriate diagram where amazon.com sets price to maximise profit (adapting Figure 7.9d from CORE ESPP) to explain in some detail how the outcomes to customers compare to a more competitive, price-taking firm.

2. In your diagram, assume at the profit-maximising point in Q2 of 2021 the average price of items is $27*, and also that Amazon’s online shopping customers are very price-conscious. Use hypothetical values (rough guesses) relying on intuition for quantities and cost.

3. In your answer, do a little more additional research and elaborate on alleged ways the monopolist sustains its profitability in light of the accusations of the attorney general for the District of Columbia

4. Use the demand and supply (D&S) model to demonstrate the change in the market conditions from Q3 2020 to Q3 2021 for the new car market and used car market in the US.

5. Use two separate D&S diagrams corresponding to the two markets, and carefully label the curves and clearly indicate all equilibrium prices and quantities.

a) For your price points, use values based on actual data where possible.
b) Use hypothetical values (rough guesses) relying on intuition for quantities.

6. What do you think the price elasticity of demand (PED) might look like for new or used cars in Q3 2021 compared to Q2 2020? In your answer, discuss a key determinant of PED.  

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