Indicate which letter below correctly identifies things that can be non-price de
ID: 1164321 • Letter: I
Question
Indicate which letter below correctly identifies things that can be non-price determinants of demand, things that can be non-price determinants of supply, and things that can be non-price determinants of both.
tastes and preferences.
income.
production technology.
future expectations.
production costs.
Non-price determinants of demand: #2, #3; Non-price determinants of supply: #4, #5; Non-price determinants of both demand and supply: #1 Non-price determinants of demand: #4, #5; Non-price determinants of supply: #1, #2; Non-price determinants of both demand and supply: #3 Non-price determinants of demand: #1, #2; Non-price determinants of supply: #3, #4; Non-price determinants of both demand and supply: #5 Non-price determinants of demand: #1, #2; Non-price determinants of supply: #3, #5; Non-price determinants of both demand and supply: #4
Explanation / Answer
Correct Answer:
Non-price determinants of demand: #1, #2; Non-price determinants of supply: #3, #5; Non-price determinants of both demand and supply: #4
Explanation:
taste & preferences as well as income of the consumers, bring a shift in demand created by the consumers, whereas production technology as well as production cost affect the supply and bring necessary right or left shift in the supply. Here, expectation are common to both the demand and supply. There are consumer expectations towards the price movement to change the demand, while there is a change in seller’s expectations also to affect the supply.