The Demand of Curve for the Market of Australian Tertiary Education

Part 1

Question 1

        The demand of curve for the market of Australian tertiary education will be affected due to school fees in the United States were going down.  The law of demand states that if the price decrease, the quantity of demand increases. Since Australia’s tertiary education is now higher than United States, so there will be less demand in Australia as their parents prefer to send their children to United States which is cheaper.

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        Based on the graph, the demand of the Australia education decreases causing the demand to shift left. The equilibrium shift from E0 to E1. The quantity demand is less than the supply and causes the demand curve to shift to the left. At new equilibrium, the demand curve shift to the left and they will be less supply when the price is low. For example, the equilibrium price of Australian tertiary education before the decrease of price in the price of tertiary education in the United State was at P1 and the quantity demanded was at Q1. After United States decreases the price of tertiary education the price of Australian tertiary education drop from P1 to P2 and the quantity demanded drop from Q1 to Q2.

 Question 2

        There will be an increase in the supply curve when the new regulations requiring people to install pollution reduction equipment. This is because it is a new product that is available in the market. It is also related to the law of supply. It states that when there is an increase in quantity demanded, the price of the product will increase. In this case, they will less demand at the new price. [pic 2]

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        Based on the graph, the supply curve shift to the left from the blue line to the green line. This is because the increase of supply and the demand decrease due the rise in price. Based on the graph, the equilibrium shift from E0 to E1 after the new regulation price. The equilibrium point before the new regulations price is P1 and quantity demanded is Q1. The price increase from P1 to P2 and the quantity will reduce from Q1 to Q2 when the supply curve move to the left. This is because of the increase in the price causing the quantity to reduce.

Question 3

        When the new medical research about tea will lower the rate of cancer, there will be more people buying the products. In this case, it will increase the demand for the tea. This will cause the demand curve to shift to the right.

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        Based on the graph, the demand shift to the right from the blue line to the red line. This is because the demand for the tea increases. The equilibrium shift from E0 to E1 after the new medical research found about tea can lower the rate of cancer. The price of the tea also will increase due to the insufficient of supply and the demand was high. So the rise in price due to the demand is to ensure that it will be at equilibrium. Based on the graph above, the equilibrium before the research is done is at P1 and Q1. After they discover that drinking teas will lower rates of cancer, the quantity demanded increases from Q1 to Q2 and the price will increase from P1 to P2 due to the insufficient of supply.

Part 2

Question 1

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        The equilibrium for Australian hair cutting industry before GST the quantity demanded is at Q1 and the price is at P1. After GST is being implemented on the next year of 1 July in Australia. The decrease in the supply in the hair cutting industry and it results the leftward shift of the supply curve. Therefore, the market price of the hair cutting industry increased and the quantity for the haircut service has decreased. Therefore, the market price of the haircut will move from E0 to E1 as the graph shown above. With the increase in price, the amount that quantity will decrease. GST makes the cost for the haircut industry to increase, so the firms from the hair cut industry will reduce the supply of their services due to high cost pressure. The tax falls on the consumer and the producer. The upper part is the consumer’s burden which is the light blue box and the producer burden which is the red box.

Question 2

        “Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service.” This causes the consumer surplus is above the equilibrium line.  It is above the equilibrium line because is the level they have to pay and it is above this line and the demand curve is the surplus. Consumer surplus is the purple triangle. (The Economics Times)

        “Producer surplus is the economic measure of the difference between the amount that producer of a good receives and the minimum amount that they are willing to accept for the good.” Producer surplus is the horizontal axis until the equilibrium point. This is the surplus that producers are willing to sell their product and what they are selling for. Producer surplus is the triangle that is filled with yellow colour. (The Economics Times)