Question

Pick a product that you consume on a regular basis. Using the Supply and Demand Model analyze the change in price and quantity that can occur. What are somethings that might shift demand for that product? What are things that might shift supply of that product? How has recent events influenced the supply and demand of that product you have chosen?

Answer 1

Answer. Let's pick Bread as one of the product.

Demand: People will buy more of the good, when prices fall. So, it slopes downward.

Supply: Produces will produce more of bread, when prices will increase. So, it slopes upward.

Equilibrium is determined at a point where both meets.

Determinants

There are various factors that can shift the demand of the product like price of related good, income of the person, taste and preferences, and expected change in price.

Similarly, there are various factors that can shift supply like change in production technique, price of inputs, taxes or subsidies, and goverbgove policy.

Change in these factors will bring about changes in equilibrium prices and quantity.

Covid and lockdown has impacted many people and reduced the income of people. So, the demand is likely to fall and thus, demand curve will shift leftward.

Also, the government by introducing policies will provide subsidy to producers, so the supply curve will increase and thus, curve will rightward.