Question

Your assignment has two parts: story and diagram. Your story should describe and explain the elements of the story in supply and demand terms. It should be typed, double-spaced, between ½ and 1 page long. It should provide a summary of the story, and then an analysis in supply & demand terms. The supply & demand diagram illustrating your story may be hand-drawn or created on your computer. If it is hand-drawn, you should take a Criteria: The diagram makes sense The story makes sense The diagram matches the story Points off if you.. Cut the story short too soon. Confuse terms (e.g. demand vs. quantity demanded). Explain behavior as "irrational" or "crazy." use simple demand and supply terms like supply, demand, equilibrium, Quantity supplied, Quantity demanded , surplus etc...

Answer 1

Answer:

In today's fast-moving world, nobody has time for personal health care and doesn't have a proper diet, as a result, people at young ages are catching chronic diseases. Given the scenario, more and more people are opting for options such as a gym where they can spend lesser time and are able to maintain their fitness.

Now, because of this change in preferences of the population, there is a favourble change in the demand for gym services. When demand increases, there will be an increase in price given the supply, as price rises there will be an increase in the quantity supplied as it is profitable for suppliers to supply more. The new equilibrium will be at the pint where increased demand equal supply.

As the demand is increasing, the suppliers will take advantage of this opportunity, so there are more and more gyms opening up and the industry is expanding which results in an increase in the supply of gym services.

As competition in the gym industry is increasing it causes the price to fall, as gym owners are competing with each other and hence trying to lower the prices to capture as much market share as they can. When the price starts falling , the quantity demanded of the gym services will increase.

The graph below depicts the scenario explained above.

due to change in pefeencs Supply Paice Gm Memberhip Jnuuan in dumand in ty uppu Inexeaoe in supply due to expaninnust PI P2 &ty demandes D' Demand by No. Gyma)