Fundamental Principles of Demand and Supply Quiz
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Questions and Answers

What are the two basic factors that influence the price of a commodity?

  • Production cost and technology
  • Consumer income and preferences
  • Demand and supply (correct)
  • Import and export

    • How does the price of a commodity change with higher demand?

  • It becomes dearer (correct)
  • It remains the same
  • It fluctuates randomly
  • It becomes cheaper

    • What happens if demand is more than supply for a commodity?

  • Imports will be used to meet the demand (correct)
  • The commodity will go out of stock
  • Equilibrium prices will rise
  • Closing stocks will be carried forward

    • What is the fundamental equation of commodity demand and supply?

    <p>Opening stock + Domestic production + imports = Domestic consumption + exports</p> Signup and view all the answers

    How does seasonality impact the price of agricultural commodities during harvesting season?

    <p>Prices tend to come down due to increased supply</p> Signup and view all the answers

    What effect does increased demand during the festival season have on the prices of precious metals like gold and silver?

    <p>Prices remain stronger</p> Signup and view all the answers

    How do news and rumors affect commodity prices in the short term?

    <p>Significantly</p> Signup and view all the answers

    What can lead to disruptions in the supply of globally demanded commodities like crude oil?

    <p>Political tensions in some parts of the globe</p> Signup and view all the answers

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