Question 1 (12 marks)
Maximum word count: 100 words

Giant, the world's leading brand of high-quality bicycles and cycling gear, announced that their pre-tax profit has decreased by almost 50% while their sales were down by approximately 16%. Watch the following excerpt from The Wild Ones Podcast Ep.41 produced by Cade Media (attached below) and answer the following questions:

(i) Which of the presenters best describes the market condition that Giant Bicycles faces and explain why you agree with him or her?

(ii) Draw a diagram of the bicycle market that illustrates the market conditions discussed in the podcast.

(iii) Explain the adjustment process to the new equilibrium position in the bicycle market.

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Question 2 (5 marks)
No words allowed, only a diagram with annotations

Suppose beer and peanuts are complements. In anticipation of warm weather conditions, Injabulo Breweries, the brewers of Number One beer, increased the production of Number One beer. Show on a diagram how this will affect the market for peanuts. Indicate how the equilibrium price and equilibrium quantity of peanuts will change. The direction of any changes should be indicated using arrows.

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Question 3 (13 marks)
Maximum word count: 250 words

The rate of installations of solar energy systems has significantly decreased in the residential market segment over the past three months, during which there has been no load shedding, compared to the same period last year. Explain the potential reasons behind this trend and discuss the implications for the future market of solar energy systems.



Answer :

Final answer:

This detailed answer covers market conditions for Giant Bicycles, impacts of beer production on peanuts market, and reasons for reduced solar energy installations in residential markets.


Explanation:

Giant Bicycles Market Conditions:

  1. The presenter describing Giant Bicycles facing a competitive market with declining profits and sales.
  2. Market Diagram: Illustrates the impact of decreased sales and profits on Giant Bicycles.
  3. Adjustment Process: Explains how the bicycle market reaches a new equilibrium post changes.

Injabulo Breweries Market Impact: The increase in Number One beer production affecting peanuts market equilibrium prices and quantity.

Solar Energy Systems Decline: Reasons for the decreased solar installations without load shedding in residential markets.


Learn more about Market Conditions, Equilibrium, Solar Energy Installations here:

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