The paper "Manner in Which Tour Down Under Has an Impact on the GDP, Production, Pricing" is a perfect example of a macro & microeconomics case study. The changes in the economic environment have an impact on the economy and it further gets affected by the sudden changes in events or other forms which thereby impacts the overall performance of the economy. The paper explores the manner in which Tour Down Under has an impact on the GDP, production, pricing, employment and other economic variables. This will thereby help to understand the relationship and the changes which the economy is expected to feel and the manner in which the overall changes will have an impact on the performance. South Australia will witness a growth in the Gross State Product as an event will look towards attracting people towards the sport.
This will consist of both people belonging to the native country as well as a foreign country. This will thereby have an impact on the aggregate demand as additional people would mean an increase in the total consumption of goods and services. People will be looking for places to stay, food, vehicle and so on.
This will thereby have a positive impact on the demand and will increase the demand in the short run. To meet the demand for goods and services more of the same will be required (Colell, Winston, Michael & Jerry, 1995). Since it is not possible to make changes in the supply chain in a short period of time as most of the factors of production are fixed and requires time to be changed which will thereby result in an increase in prices.
This is primarily due to the fact that the economy is witnessing more money chasing fewer goods and will thereby have an impact on the prices as it will increase. This has been shown below The above chart shows that in the short run a change in demand results in an increase in price as the supply is not able to grow in the same proportion to meet the demand. This makes the prices of the goods and services rise rapidly as shown in the above graph where the price of the product and services has considerably increased.
Further, the increase in demand hasn’ t allowed the supply to increase as per the demand in the short run which has created a gap and thereby impacted the price of the product by pushing it higher (Docters, Schefers, Korman & Durman, 2008).
Colell, M., Winston, A., Michael, D. & Jerry, R. 1995. Microeconomic Theory. 3r Edition, New York, Oxford University Press, Pearson Education
Docters, R., Schefers, B., Korman, T. & Durman, C. 2008. The neglected demand curve: how to build one and benefit. Journal of Business Strategy, Volume 25, issue 5, pp. 19-25
Garg, S. 2010. Microeconomics: Introductory. 7th edition, pp 3.11-9.17, Dhanpat Rai Publication
Mayerhoefer, C. & Zuvekas, S. 2008. The shape of demand: what does it tell us about direct to consumer marketing. The B.E. Journal of Economic Analysis & Policy, Volume 18, Issue 2, pp. 4-8
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