E
, CS1501 Assignment 5 (COMPLETE ANSWERS) 2024 (65455
2) - DUE 22 July 2024 ; 10 0%
Question 1 (12 marks) Maximum word count: 100 words Giant, the world’s
leading brand of high-quality bicycles and cycling gear, announced that their
pre-tax profit has decreased by almost 50% while their sales were down by
approximately 16%. Watch the following excerpt from The Wild Ones Podcast
Ep.41produced by Cade Media (attached below) and answer the following
questions. (i) Which of the presenters best describes the market condition that
Giant Bicycles faces and explain why you agree with him or her? (ii) Draw a
diagram of the bicycle market that illustrates the market conditions discussed
in the podcast. (iii) Explain the adjustment process to the new equilibrium
position in the bicycle market.
(i) Based on the excerpt from The Wild Ones Podcast Ep.41, Presenter
A best describes the market condition that Giant Bicycles faces.
Presenter A explains that the decline in pre-tax profit and sales is due to
a combination of supply chain disruptions, increased competition, and
shifts in consumer preferences. I agree with this assessment because
these factors are common challenges in the bicycle market, especially
during economic downturns or post-pandemic adjustments, affecting
both production costs and consumer demand.
(ii) Below is a diagram illustrating the market conditions:
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Price
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| D1 D2
| | |
| | |
| | |
| | |
|------------------------ Quantity
Q1 Q2