Understanding Supply and Demand

What happens when a new popular product like the Prager station is released with limited availability?

• Prices decrease

• Demand decreases

• Supply increases

• Demand exceeds supply

What factors influence how much of a product a business decides to produce?

• Production costs and resources

• Consumer preferences only

• Global events only

• Demand only

What is the relationship between supply and demand?

• Unrelated to each other

• Directly proportional

• Complex and interdependent

• Inversely proportional

What is a surplus in the market?

• High demand with low supply

• Low demand with high supply

• Balanced supply and demand

• Low supply and low demand

What typically causes prices to increase?

• Surplus of products

• Decrease in technology

• Shortage of products

• Stable market conditions

What can lead to a shortage in the market?

• A decrease in consumer interest

• Government regulations reducing demand

• An increase in production costs

• High demand with low supply

How can global events affect the market?

• Only increase supply

• Can cause fluctuations in supply and demand

• They have no effect

• Only affect demand

What might happen if the government imposes strict production controls?

• Scarcity and higher prices

• Increase in surplus

• Stable market conditions

• Decrease in prices

What should you do to make smart shopping decisions?

• Wait for demand to decrease for lower prices

• Only buy during a surplus

• Always buy products immediately

• Ignore market trends

Why is understanding supply and demand important for businesses?

• Only helps in marketing

• Only necessary for large businesses

• It isn't important

• Helps in setting prices