16.5 SkillBuilder activity INTERPRETING AND ANALYSING DATA AND INFORMATION Each product has a different set of conditions that impact that market. While the general rules for demand and supply do operate, sometimes individual markets have their own special set of circumstances that impact the demand and/or supply of the products in that market. For each of the following scenarios, use the demand and supply curve diagram below to draw new curves to reþect the changes in demand and/or supply. For each graph, explain what has happened and the effect on demand and/or supply. a. The effect on the market for plastic swimming pools of a heatwave b. The effect on the market for iPhone 15s of the announcement of the release of an iPhone 16 FIGURE5 The demand and supply curve 5
c. The effect on the market for petrol-driven cars of improved technology for electric vehicles d. The effect on the market for energy drinks of a government ban on their sale to people under 18 years of age.
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Exercise
Learning pathways LEVEL1 1, 2, 3, 4, 5
LEVEL2
LEVEL3
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REMEMBER AND UNDERSTAND 1. A market is where buyers and sellers ___________________ and ___________________ money for goods and services. 2. State the law of demand. 3. State the name of the point where demand and supply intersect on a graph. 4. State the law of supply. 5. State the factor that both the law of demand and the law of supply have in common. ANALYSE AND APPLY 6. Explain why there is no surplus or shortage when a market is at equilibrium. 7. Explain the impact of a prolonged drought on the market for lettuce. 8. Explain the likely impact of a cut in income tax by the government on the market jewellery. EVALUATE AND COMMUNICATE 9. Deýne the term ‘equilibrium’ and discuss how it works. 10. Discuss the concept that non-price factors have more impact than price on the demand for clothes. Answers and sample responses for this topic are available online.
TOPIC16 How markets work 565
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