Question

please respond with at least 150 words Thank you!!

1. Price changes

Identify at least 3 items that have changed in price recently. Speculate on what demand or supply factors might have been responsible for the change in equilibrium price.  

Some examples you can use are gas, milk, shoes, and cars.

Answer 1

Three goods that have experienced a price change is Fuel (Gas) their prices have increased, Cars their prices have decreased and food items whose prices have increased.

Gas: The price of gas generally depends on the world market. Recently world market has seen a surge in the price of petroleum product because the OPEC countries have cut the production of oil. Due to less supply and more demand for these products the price has gone up.

Cars: Cars use petrol for their functioning. Because the price of the products is going up, the prices of cars are coming down. Because the operating cost of using a car in increasing and demand for them is coming down forcing the companies to cut the price.

Food items: This year has witnessed an increase in the demand for food and hence the price has gone up. Apart from that severe natural calamities have reduced the production capability of the world and increased the price of the food products.