Difference between a normal good and an inferior good, Macroeconomics

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Price/Feeder Quantity Demanded Quantity Supplied $300 500 1800 270 600 1700 240 700 1600 210 800 1500 180 1000 1400 150 1100 1300 120 1200 1200 90 1300 1100 60 1400 1000 30 1500 900 10 1600 800 1. Construct a graph showing supply and demand in the electronic dog feeder market, using Microsoft Excel. 2. How are the laws of supply and demand illustrated in this graph? Explain your answers. 3. What is the equilibrium price and quantity in this market? 4. Assume that the government imposes a price floor of $180 in the feeder market. What would happen in this market? 5. Assume that the price floor is removed and a price ceiling is imposed at $90. What would happen in this market? 6. Now, assume that the price of feeders drops by 50%. How would this change impact the demand for feeders? Explain your answer and reconstruct the graph developed in question one to show this change. 7. Assume that incomes of the consumers in this market increases. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change. 8. Assume that the number of sellers decreases in this market. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change. 9. Explain the difference between a normal good and an inferior good. Would your answers to question 7 change depending on whether this good is a normal or inferior good? Why?


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