1.2 the market

Question 1

Supply’s impact

Answer 1

The amount that businesses are willing and able to supply will have a major impact on the price of products.

Question 2

FACTORS affecting supply

Answer 2

Changes in production costs
Introduction of new tech
Indirect taxes
Government subsidies
External shocks

Question 3

How is price determined in commodity markets

Answer 3

By supply or demand; when demand falls the price will decrease to increase demand and make supply equal demand again. Vice versa.

Question 4

If theres an increase/decrease in supply/ demand, which way does the line move

Answer 4

Increase - right

Decrease - left

Question 5

What do supply and demand diagrams show

Answer 5

shows how much of a product would be demanded /businesses are willing to supply at a range of different price levels.

Question 6

define Indirect taxes

Answer 6

taxes that the government imposes on goods and services (VAT)

Question 7

Define commodity markets

Answer 7

Are markets for undifferentiated products, generally raw materials like rice

Question 8

Equilibrium

Answer 8

Describes a situation in a market where supply and demand are balanced - making the price stable