Questions: For each example, determine how the market for the good in bolded text will respond to the described change. a. A website offers a buy-one-get-one-free special for digital music albums. b. At a week-long special at the grocery store, pork shoulder is on sale at 1.99 / lb, down from 3.99 / l. c. A sharp increase in the price of wood causes increases in prices for dressers and desks. d. A company offers a coupon for 6 off the price of laser tag. e. Due to increases in hay prices, an input for raising cattle, the price of a gallon of 2% milk increases from 2.98 to 3.25.

To determine how the market for the good in bolded text will respond to the described change, we need to consider the basic principles of supply and demand. Here’s an analysis for each example:

a. Digital music albums: A website offers a buy-one-get-one-free special for digital music albums.

• The answer is: The demand for digital music albums will likely increase.
• Explanation: A buy-one-get-one-free special effectively reduces the price per album, making it more attractive for consumers to purchase. This promotional offer increases the quantity demanded as consumers perceive greater value.

b. Pork shoulder: At a week-long special at the grocery store, pork shoulder is on sale at $1.99/lb, down from $3.99/lb.

• The answer is: The demand for pork shoulder will likely increase.
• Explanation: The significant price reduction makes pork shoulder more affordable, leading to an increase in quantity demanded. Consumers are more likely to buy more pork shoulder at the lower price.

c. Dressers and desks: A sharp increase in the price of wood causes increases in prices for dressers and desks.

• The answer is: The supply of dressers and desks will likely decrease, leading to higher prices.
• Explanation: Wood is a key input in the production of dressers and desks. An increase in the price of wood raises production costs, which can reduce the supply of these goods. As a result, the market price for dressers and desks increases due to the reduced supply.

d. Laser tag: A company offers a coupon for $6 off the price of laser tag.

• The answer is: The demand for laser tag will likely increase.
• Explanation: The coupon effectively lowers the price of laser tag for consumers, making it more attractive. This price reduction increases the quantity demanded as more consumers are likely to take advantage of the discount.

e. 2% milk: Due to increases in hay prices, an input for raising cattle, the price of a gallon of 2% milk increases from $2.98 to $3.25.

• The answer is: The supply of 2% milk will likely decrease, leading to higher prices.
• Explanation: Hay is an essential input for raising cattle, which produce milk. An increase in hay prices raises the cost of milk production, reducing the supply of 2% milk. Consequently, the market price for 2% milk increases due to the reduced supply.

In summary, the market responses are driven by changes in supply and demand dynamics influenced by price changes, promotional offers, and input costs.