ECS1501
ASSIGNMENT 5
DUE 22 JULY 2024
2024
, Question 1
(i) Presenter Best Describing Market Conditions
Presenter B best describes the market condition that Giant Bicycles faces. He points out
the impact of increased competition and reduced consumer spending due to economic
downturns. This aligns with the significant drop in Giant's pre-tax profit, despite a smaller
decline in sales, indicating pricing pressures and higher operational costs.
(ii) Diagram of the Bicycle Market
iii) The decreased demand for bicycles shifts the demand curve leftward, resulting in a
lower equilibrium price and quantity. As demand drops due to economic downturns and
increased competition, Giant Bicycles faces reduced pricing power, leading to lower profits.
ASSIGNMENT 5
DUE 22 JULY 2024
2024
, Question 1
(i) Presenter Best Describing Market Conditions
Presenter B best describes the market condition that Giant Bicycles faces. He points out
the impact of increased competition and reduced consumer spending due to economic
downturns. This aligns with the significant drop in Giant's pre-tax profit, despite a smaller
decline in sales, indicating pricing pressures and higher operational costs.
(ii) Diagram of the Bicycle Market
iii) The decreased demand for bicycles shifts the demand curve leftward, resulting in a
lower equilibrium price and quantity. As demand drops due to economic downturns and
increased competition, Giant Bicycles faces reduced pricing power, leading to lower profits.
