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Chapter 4 Reflection

Because of the convenience of using Uber, I would expect consumers to prefer it over traditional taxis. Even if they didn't have a strong preference, there would be an increase in the availability of transportation. So the supply of transportation shifts to the right. When demand for taxis decreases, the demand curve shifts to the left. This creates a surplus, so prices fall towards the equilibrium.

When I worked a snow-cone and hot dog booth one summer for a weekend festival, during the last hour of the last day we would offer buy-two-get-one-free deals. Prices decreased when demand decreased. Because the product on hand could not be saved for future sales, it was better to capture a smaller profit margin than no sale at all. 

AirBnB increases the supply of rooms to rent beyond just the typical hotels, which shifts the supply curve to the right. I expect that because it is such a popular metro, prices may stay stable because consumers will demand rooms in San Francisco at any price.

Another example could be when NGO's donate huge quantites of supplies to a developing country, such as rice or building materials. When this happens long-term, it creates a surplus and local farmers or craftsmen respond by having to lower their prices. This actually harms their economy more than the supposed charity helps.

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