Between recalls on mass-produced commercial dog food and a growing understanding of the benefits of a healthier diet for pets, the demand for natural or organic dog food is experiencing a significant increase. Wanda’s treats are not cheap, and she wonders if maybe Salty Pawz products are overpriced. Wanda knows nothing about the economics of supply and demand, so she comes to you for advice.

Your Task

The Salty Pawz margins are good, but would Wanda be better off by lowering prices and potentially selling more? Would dropping her price even make a difference, or would she just be giving away her profits? What would be the impact on demand if she reduced her price?

Use the “Supply and Demand” data beginning on page 9 of the Salty Pawz Case Study.  The case study is located in Module – Students Resources: Salty Pawz Case- Study Information.  The information there illustrates the potential impacts on the quantity supplied and quantity demanded at various price points for Salty Pawz products.

• Using the charts and data, create a graphical representation of Supply and Demand Curves for the four Salty Pawz products that Wanda sells.
• For each product, determine the equilibrium point where Quantity Supplied = Quantity Demanded.

You need to include a written explanation of the impact based on the reduction or increase of the Supply and demand.