Question

The diagrams below indicate four possible shifts in demand or in supply that could happen in particular markets. Relate each of the events described below to one of them. Also, give reason for the shift.

1. How does the lorry strike in Karnataka and Tamil Nadu affect the market for vegetables in Kerala? 

2. People become aware of the fact that Birds Eye Chilly is very much helpful to prevent Cholesterol. What happens to the market for Birds Eye Chilly? 

3. How do you think the rising income affect the market for fish? 

4. A new technique is discovered for manufacturing computer that greatly lowers their production cost. What happens to the market for computers?

Answer 1

1. figure C, supply falls and price rises. 

2. figure A, demand increases and price rises. 

3. figure B, demand increases and price rises. 

4. figure D, supply increases and price falls.