Please Analyze and explain the theory of Demand and Supply and create the
graph for demonstrating the following scenario and answer the questions:
● G.R. Dry Foods Distributors specializes in the wholesale distribution of dry goods, such
as rice and dry beans. The firm’s manager is concerned about an article he read in this
morning’s Wall Street Journal indicating that the incomes of individuals in the lowest
income bracket are expected to increase by 10 percent over the next year. While the
manager is pleased to see this group of individuals doing well, he is concerned about the
impact this will have on G.R. Dry Foods.
o Please explain what will happen to the price of the products G.R. Dry Foods sells?
With the incomes of the lowest earners about to increase by 10%, these individuals will prefer better foods to rice and dry foods. As such, the quantity demanded for these goods will reduce. According to the laws of demand and supply, the company will have to lower its prices if it wishes to attract more customers. With reduced prices, these people might find the goods more attractive once more.