the market

Question 1

define the term substitute goods

Answer 1

this is a product that fulfills a similar purpose to another product, however, it may be of bad quality or low economic manufacturer - making it a product that has a rise in sales when the average income decreases.

Question 2

a factor that affects demand and supply

Answer 2

average income is a significant factor that influences demand - rises - and the consequence of this is that the supply naturally increases as its the businesses best interest to maximise sales revenue.

Question 3

define the term government subsidies

Answer 3

capital collected from taxes and reinvested back into local economies (businesses) for different functions e.g. the payment of raw materials or rent.

Question 4

an external shock that may influence the supply and demand of cars

Answer 4

the covid 19 pandemic will influence the supply and demand of cars as the governemnt made strict restrictions on the sale of new and used cars which significantly reduces the supply of cars and bans made on the purchase of cars during the pandemic severly reduced the demand.