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Social ScienceWhat would cause a change in demand, and a change in supply?
Expert Answer
Change in demand is caused by the demand factors other than price. Therefore the following factors affects the change in demand:
- Income: With the increase n income, the demand for goods increases
-Price of related goods: With the increase in price of substitutes, the demand of good increases. And with the increase in price of complimentary goods, the demandd of good decreases.
-Change in preferences: The favorable change in preference of consumer will increasse the demand and vice versa.
-Expectation of price in future: With the consumer of higher price in fture, the demand of goods increases and vice versa.
Change in supply of goods will be caused by the factors other than price. Therefore, the following factors affects the change in supply:
-Cost of inputs: With the increase in price of inputs used in production, the margin of supplier reduces thus they will decrease the supply.
-Price of othe...
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