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Problems Associated with Demand and Supply Essay

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Problem 1: If demand of MBA graduates increases in Bangladesh, then what happens to their equilibrium price (or salary)?

Figure 1

Ceteris paribus, an increase in demand will increase the equilibrium wage of MBA graduates.
In the chart, when the demand curve shifts from D1 to D2, the equilibrium point changes from E1 to E2 thus leading the Price( or salary of the graduates) increasing from P1 to P2 and also the Quantity demanded from Q1 to Q2.

Problem 2: If both the demand & the supply of MBA graduates increase in Bangladesh then what would happen to their equilibrium prices/ salaries.

Figure 2
If the demand and supply shifts equally, then the price will remain same but the quantity demanded for MBA graduates will go high.
In figure 2, both demand and supply curve have taken an equal rightward shift. Thus, Price has remained constant at Po but Quantity demand has gone from Qo to Qe. A new equilibrium point has also been identified ensuing from the shifts in the curves.

Figure: 3

If the supply curve takes more rightward shift than the demand curve then the price will decrease. As depicted in Figure 4, the supply curve takes more rightward shift than that of Demand curve’s shift from D1 to D2. Therefore, the price decreases from p1 to p2 and thus we end up having a new equilibrium point e2.

If the demands curve shifts more than supply curve, then the price and the quantity demanded will increase. In figure 4, the equilibrium price is p1 and quantity demanded is Q1. When Demand curve shifts rightward from DD to DD2 and supply curve takes a shift from SS to SS2, the price increases from P1 to P2 and the equilibrium point changes.

Problem 3: What factors would increase or decrease the demand of MBA graduates in Bangladesh? Explain using figures and real-life examples.


Figure: 5

There are several factors which could increase the demand for MBA graduates, some of which are...

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"Problems Associated with Demand and Supply". Anti Essays. 15 Dec. 2018


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