Demand And Supply

Question 1

What is a market

A m i a p w b a s i a t g a s

Answer 1

A Market is a place where buyers and sellers interact and
trade goods and services

Question 2

What are the 5 types of markets called

F m
F m
C m
G m
B m

Answer 2

Final Markets
Factor Markets:
Commodities Markets
Global Markets
Black Markets

Question 3

What is demand

Answer 3

Demand is the quantity of a product that consumers are willing
to buy at a given price.

● When prices are low, the demand for a product increases
● When prices are high, the demand for a product decreases

Question 4

What is supply

S i t Q o a p t p a w t s a a g p

Answer 4

Supply is the quantity of a product that producers are willing to
sell at a given price.

● When prices are high, the supply of a product increases
● When prices are low, the supply of a product decreases

Question 5

What is the law of demand

Answer 5

● If the price of a product rises the quantity demanded falls
● If the price of a product falls the quantity demanded rises

Question 6

What are the 3 relationships between demand and price

H c
S o c
H

Answer 6

Housing Crisis

Sold Out Concert

Holidays

Question 7

Housing (relationships between demand and price)

i d f h i i h c t p t r

Answer 7

Increased demand for houses in Ireland has
caused the price to rise

Question 8

Sold Out Concert (relationships between demand and price)

i d f a p c c t p o t t r

Answer 8

Increased demand for a popular concert causes the price of tickets to rise

Question 9

Holidays ( relationships between demand and price)

H a f p r d s h a d i h a t t

Answer 9

Hotel and Flight prices rise during school holidays as demand is higher at this time.

Question 10

What are the 8 Factors affect demand

P
F
S
A
E o b
I c
P o s g
P o c g

Answer 10

Price 1
Fashion 2
Season 3
Advertising 4
Expectations of buyers 5
Income levels 6
Price of substitute goods 7
Price of complimentary goods 8

Question 11

Factors affect demand PRICE

Falls
And
Rises

Answer 11

When the price of a good goes up, goods are more expensive and the
demand will fall. When the price for a good goes down, goods are cheaper
and the demand will rise.

Question 12

Factors that affect demand FASHION

A c t c, d f p w c

Answer 12

As consumer tastes change, demand for products will change
e.g. Furby’s were popular in 2001 but not anymore.

Question 13

Factors that affect demand SEASON
D f s p c d o t o y

Answer 13

Demand for some products change depending on time of year e.g.
ice-cream in the summer.

Question 14

Explain how advertising can affect demand

P t a h a m s a i i d

Answer 14

Products that are heavily advertised may see an increase in
demand. e.g. Ed Sheeran concert

Question 15

Explain how expectations of buyers can affect demand

Answer 15

If customers expect prices to rise in the future they may demand more now.
Similarly, if customers expect prices to fall in the future, they may demand less now.

Question 16

Explain how Income level is a factor that can affect demand

I a p i r, t w d m g a s

Answer 16

If a person’s income rises, they will demand more goods and services

Question 17

Explain how price of substitute good are a factor that can affect demand

Answer 17

Some goods have close substitutes. This means they can
be used as alternatives to each other. E.g. Coca Cola and Pepsi. When the price of
Coca Cola goes up, some consumers may switch to the cheaper alternative Pepsi.

Question 18

Explain how the price of complimentary goods are factors that can affect demand

Answer 18

Some goods are used jointly e.g. Tennis Racket
and Tennis Balls. If the price of a Tennis racket goes up, the demand for Tennis balls
will fall.

Question 19

What is the law of supply

I t p o a p r/f, t Q s r/f

Answer 19

● If the price of a product rises, the quantity supplied rises
● If the price of a product falls, the quantity supplied falls

Question 20

What are the 3 types of relationships between price and supply

S
L
W

Answer 20

Strawberries
Labour
Wheat

Question 21

Strawberries ( relationship between price and supply

G w m r i a g c o s, t m L a e s t t f m h t s t g r o t

Answer 21

good weather may result in a good crop of strawberries. This might lead an excess supply that the farmer might have to sell cheaper to get rid of them.

Question 22

Labour (relationships between price and supply)

i a L n o p a u i D, t m t w w b w t a L w

Answer 22

if a large number of people are unemployed in Dublin. There is excess supply, this means that workers will be willing to accept lower wages

Question 23

Wheat (relationships of prove and supply

B w m r i a p c o w. F m c a h p a t i a s o w

Answer 23

Bad weather may result in a poor crop of wheat. Farmers
may charge a higher price as there is a shortage of wheat.

Question 24

What are the 5 factors affecting supply

P
P o r g
P c
T
E

Answer 24

Price
Price of related goods
Production costs
Technology
environment

Question 25

Explain how price is one of the factors of affecting supply

Answer 25

When the price of a good goes up, goods are more profitable for the producer so the supply will rise. When the price of a good goes down, goods are less profitable for the producer so they will supply less.

Question 26

Explain how price of related goods is one of the factors that affect demand T p o s a c g m c t c t s t/s b o p w w a t a s o o p

Answer 26

The price of substitute and complementary goods may cause the consumers to switch to/stop buying our product which will affect the available supply of our product.

Question 27

Explain how production costs is a factor affecting supply W t c o m a p i L, m g w b s a i i c

Answer 27

When the cost of making a product is low, more goods will be supplied as it is cheaper.

Question 28

Explain how technology is a factor affecting supply i i t a m m i e f g t b m w i s

Answer 28

improvements in technology and machinery make it easier for goods to be made which increases supply

Question 29

Explain how environment is a factor affecting supply

Answer 29

good/bad weather can affect a crop. Bad weather might mean the is less supply of wheat. Good weather might mean that there is too much supply of wheat.

Question 30

What is the equilibrium point

Answer 30

In the marketplace, supply and demand interact until a balance or equilibrium position is reached.