Set Up A Spreadsheet To Illustrate The Effects Of Changing Economic Assumptions On The Demand For Sunbest Orange Juice. Use The Demand Function To Calculate Demand Based On Three Different Underlying Assumptions Concerning Changes In The Operating Environ

Demand and supply functions for Sunbest orange juice can be combined with data on the operating environment to construct estimates of demand, supply, and the amount of surplus or shortage under each operating scenario.

A. Set up a table or spreadsheet to illustrate the effects of changing economic assumptions on the demand for Sunbest orange juice. Use the demand function to calculate demand based on three different underlying assumptions concerning changes in the operating environment. First, assume that all demand factors change in unison from levels indicated in the Optimistic Scenario #1 to the levels indicated in Pessimistic Scenario #10. Second, fix all demand factors except the price of Sunbest at Scenario #6 levels, and then calculate the quantity demanded at each scenario price level. Finally, fix all demand factors except temperature at Scenario #6 levels, and then calculate demand at each scenario temperature level.

B. Set up a table or spreadsheet to illustrate the effects of changing economic assumptions on the supply of Sunbest orange juice. Use the supply function to calculate supply based on three different underlying assumptions concerning changes in the operating environment. First, assume that all supply factors change in unison from levels indicated in the Optimistic Scenario #1 to the levels indicated in Pessimistic Scenario #10. Second, fix all supply factors except the price of Sunbest at Scenario #6 levels, and then calculate the quantity supplied at each scenario price level. Finally, fix all supply factors except temperature at Scenario #6 levels, and then calculate supply at each scenario temperature level.

C. Set up a table or spreadsheet to illustrate the effect of changing economic assumptions on the surplus or shortage of Sunbest orange juice that results from each scenario detailed in part A and part B. Which operating scenario results in market equilibrium?

D. Are demand and supply more sensitive to changes in the price of Sunbest or to changes in temperature?

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