Before Mid-Autumn Festival, there is no change in both the demand supply for mooncakes. As shown in the diagram, the supply S and demand D remain constant. The equilibrium price is P 1 and quantity transacted is Q 1.
During Mid-Autumn Festival, people will buy mooncakes for both self-consumption and gifts, leading to an increase in demand for mooncakes, the demand curve shifts rightwards from D 1 to D 2. Mooncake suppliers will also increase their supply of mooncakes, leading to an increase in supply of mooncakes, the supply curve shifts rightwards from S 1 to S 2. Since the increase in demand is greater than the increase in supply, the price of mooncakes rise from P 1 to P 2. The quantity transacted increases from Q 1 to Q 2.
During Mid-Autumn Festival, people will buy mooncakes for both self-consumption and gifts, leading to an increase in demand for mooncakes, the demand curve shifts rightwards from D 1 to D 2. Mooncake suppliers will also increase their supply of mooncakes, leading to an increase in supply of mooncakes, the supply curve shifts rightwards from S 1 to S 2. Since the increase in demand is greater than the increase in supply, the price of mooncakes rise from P 1 to P 2. The quantity transacted increases from Q 1 to Q 2.
*1 Wing Wah, Maxim's, Tai Pan
The demand for jelly mooncakes increases. As shown in the diagram, the demand curve for jelly mooncakes shifts rightwards from D 1 to D 2. The equilibrium price for traditional mooncakes increases from P 1 to P 2, and the quantity transacted increases from Q 1 to Q 2.
The demand for jelly mooncakes increases. As shown in the diagram, the demand curve for jelly mooncakes shifts rightwards from D 1 to D 2. The equilibrium price for traditional mooncakes increases from P 1 to P 2, and the quantity transacted increases from Q 1 to Q 2.
Since jelly mooncakes are substitutes for traditional mooncakes, people now buy fewer traditional mooncakes. There is a decrease in demand for traditional mooncakes. As shown in the diagram, the demand curve for traditional mooncakes shifts leftwards from D 1 to D 2. The equilibrium price for traditional mooncakes drops from P 1 to P 2, and the quantity transacted decreases from Q 1 to Q 2.
Since jelly mooncakes are substitutes for traditional mooncakes, people now buy fewer traditional mooncakes. There is a decrease in demand for traditional mooncakes. As shown in the diagram, the demand curve for traditional mooncakes shifts leftwards from D 1 to D 2. The equilibrium price for traditional mooncakes drops from P 1 to P 2, and the quantity transacted decreases from Q 1 to Q 2.
Traditional mooncakes have an elastic demand. As the price goes down from P 1 to P 2, the quantity demanded for traditional mooncakes will increase from Qd 1 to Qd 2. The percentage increase in quantity demanded is greater than the percentage decrease in price. The gain in the increase in quantity demanded is greater than the loss in decrease in price. Therefore, the total revenue of traditional mooncakes increase.
Traditional mooncakes have an elastic demand. As the price goes down from P 1 to P 2, the quantity demanded for traditional mooncakes will increase from Qd 1 to Qd 2. The percentage increase in quantity demanded is greater than the percentage decrease in price. The gain in the increase in quantity demanded is greater than the loss in decrease in price. Therefore, the total revenue of traditional mooncakes increase.
Since the two products are in competitive demand, the increase in the quantity demanded of traditional mooncakes will lead to a decrease in the demand for jelly mooncakes. There will be a leftward shift in the demand curve from D 1 to D 2. Thus, there will be a decrease in the sales revenue of jelly mooncakes.
Since the two products are in competition, the increase in the quantity demanded of traditional mooncakes will lead to a decrease in the demand for jelly mooncakes. There will be a leftward shift in the demand curve from D 1 to D 2. Thus, there will be a decrease in the sales revenue of jelly mooncakes.
References
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