Question

                                                                                                  Brainstorming Question

What good or service has experienced a shift in demand or supply. Explain the reasons behind the shift and how that has influenced the equilibrium price.

Answer 1

In different countries there are different products and services that have faced the shift in demand and supply. Though, there are travel & tourism services that have faced the shift in demand and people across the globe, have more demanded the travel & tourism services. As a result, it has taken a rightward shift in the demand curve. The major reason behind the shift in demand is the rise in income of the middle class individuals. It has increased the disposable income to be increased. . As a result, more income is available to be spent on travel & tourism services. The second reason is the increase in trade cooperation between the countries. It has caused the increase in issuance of Visa and other formalities. The third reason is the widespread presence of transportation services and flight carriers that will facilitate the movement of individuals.
Further, the supply of services has also increased due to increased awareness among the producers and the owners of the tourism properties.
But, an increase in demand is greater than the increase in supply. So, the price of the travel & tourism services has increased with an increase in quantity at equilibrium.