supply and demand

Question 1

4 factors leading to change in demand

Answer 1

• fashions, tastes and preferences
• advertising and branding
• demographics
• external shocks (e.g. a recession - sudden economic downturn)

Question 2

3 factors leading to change in supply

Answer 2

• indirect taxes (taxes on things like electricity or gas - if they go down, supply will go up)
• government subsides (a government gives money to a business to reduce it’s production costs)
• external shocks (e.g. severe drought in farming areas)

Question 3

what is meant by equilibrium?

Answer 3

the price at which the quantity demanded by customers is equal to the quantity supplied by businesses