Assignment: Supply and Demand for Salty Pawz

Scenario

Between recalls on mass-produced commercial dog food and a growing understanding of the benefits of a healthier diet for pets, the demand for natural or organic dog food is experiencing a significant increase. Wanda’s treats are not cheap, and she wonders if maybe Salty Pawz products are overpriced. Wanda knows nothing about the economics of supply and demand, so she comes to you for advice.

Your Task

The Salty Pawz margins are good, but would Wanda be better off by lowering prices and potentially selling more? Would dropping her price even make a difference, or would she just be giving away her profits? What would be the impact on demand if she reduced her price?

Use the “Supply and Demand” data beginning on page 9 of the Salty Pawz Case Study. The information there illustrates the potential impacts on quantity supplied and quantity demanded at various price points for Salty Pawz products.

  • Using the charts and data, create a graphical representation of Supply and Demand Curves for the four Salty Pawz products that Wanda sells.
  • For each product, determine the equilibrium point where Quantity Supplied = Quantity Demanded.

NOTE: In order to facilitate your creation of these charts, an Excel spreadsheet is provided containing the figures shown in the case study. When you download this file, use “Save As” and rename the file. If for some reason you overwrite the file, don’t panic. You can always come back to the course and download a clean copy.

Download the spreadsheet “Salty Pawz Product Response in Supply & Demand to Price Changes”.

Grading Rubric

Sample Grading Rubric
Criteria Not Evident: 0% Developing: 55% Proficient: 80% Distinguished: 100% Weight
Create graphical representations of the supply and demand curves for the four Salty Pawz products. 0 points 11 points 16 points 20 points 20%
Accurately determines equilibrium point for each Salty Pawz product. 0 points 11 points 16 points 20 points 20%
Provides analysis of impact of lower product prices that is qualified with data from data and graphical representations. 0 points 7.5 points 12 points 15 points 15%
Provides explanation of impact of dropping price that is qualified with data from data and graphical representations. 0 points 7.5 points 12 points 15 points 15%
Explains impact on demand based on reduction of product price, and substantiates with data and graphical representations. 0 points 7.5 points 12 points 15 points 15%
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas). 0 points 7.5 points 12 points 15 points 15%

Total points possible: 100.