Supply and demand problems?

Question

Looking at the following situations, please list 2 reasons why

a. the demand curve for popcorn would shift outwards

b. the demand curve for jeans would shift inwards

c. the demand curve for pizza would shift outwards

d. the demand curve for guns would shift outwards

e. the supply curve for guns would shift outwards

f. the supply curve for condoms would shift inwards

Answer 1

A

Reason 1: The price of cinema tickets falls.

Reason 2: The price of crisps (potato chips) increases.

B

Reason 1: It may be summer time where people were prefer buy and wear shorts as opposed to jeans.

Reason 2: A sports clothes company starts a heavy promotional campaign for their own trousers.

C

Reason 1: The pizza company heavily advertises their pizzas.

Reason 2: The price of other take-away foods increases eg. Burgers.

D

Reason 1: Increasing crime rates.

Reason 2: The price of bullets decreases.

E

Reason 1: The price of metal used to make the guns decreases.

Reason 2: A more efficient method is discovered to produce guns.

F

Reason 1: The price of latex decreases.

Reason 2: A more efficient method is found to produce condoms.

Basically with these questions, when you talk about demand shifting think about the compliments and substitutes for that product. So for the popcorn example, cinema tickets are a compliment and crisps are a substitute. With shifts in supply think about the prices of the inputs and production efficiency. Then they're really simple to answer.

Hope that helps.