Questions and Answers
True or false: Factors affecting demand and supply are independent of each other?
False
True or false: Changes in consumer income can affect demand?
True
True or false: Changes in production costs can affect supply?
True
True or false: Changes in price have no effect on demand and supply?
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True or false: Changes in population can affect demand and supply?
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True or false: Changes in government policies have no impact on demand and supply?
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Study Notes
Demand and Supply Factors
- Factors affecting demand and supply are not independent of each other.
- Changes in consumer income can affect demand, as an increase in income can lead to an increase in demand, and vice versa.
- Changes in production costs can affect supply, as an increase in production costs can lead to a decrease in supply, and vice versa.
- Changes in price can affect both demand and supply, as an increase in price can lead to a decrease in demand and an increase in supply, and vice versa.
- Changes in population can affect both demand and supply, as an increase in population can lead to an increase in demand and supply, and vice versa.
- Changes in government policies can affect both demand and supply, as policies such as taxes, subsidies, and regulations can influence demand and supply.
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