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    2.1, 2.2 - Supply and Demand Upgrade PDF

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    Population growth can increase demand for food, shifting the demand curve to the right and raising prices. Natural disasters like droughts or floods can damage crops and fields, reducing the food supply, shifting the supply curve to the left and also raising prices. Both increasing demand from more people and decreasing supply from natural disasters that damage agriculture can potentially cause world food prices to increase.

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    2.1, 2.2 - Supply and Demand Upgrade PDF

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    16 views2 pages
    Population growth can increase demand for food, shifting the demand curve to the right and raising prices. Natural disasters like droughts or floods can damage crops and fields, reducing the food supply, shifting the supply curve to the left and also raising prices. Both increasing demand from more people and decreasing supply from natural disasters that damage agriculture can potentially cause world food prices to increase.

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    Population growth can increase demand for food, shifting the demand curve to the right and raising prices. Natural disasters like droughts or floods can damage crops and fields, reducing the food supply, shifting the supply curve to the left and also raising prices. Both increasing demand from more people and decreasing supply from natural disasters that damage agriculture can potentially cause world food prices to increase.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    16 views2 pages

    2.1, 2.2 - Supply and Demand Upgrade PDF

    Uploaded by

    forrandomwebs1
    Population growth can increase demand for food, shifting the demand curve to the right and raising prices. Natural disasters like droughts or floods can damage crops and fields, reducing the food supply, shifting the supply curve to the left and also raising prices. Both increasing demand from more people and decreasing supply from natural disasters that damage agriculture can potentially cause world food prices to increase.

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    You are on page 1of 2

    Artem Skorobogatov

    Mr. Jonathan Povey

    2.1, .2.2 - Supply and Demand Upgrade

    19th December, 2023

    Ques on 1 - Explain how one possible demand factor and one possible supply factor might cause

    an increase in world food prices.

    Demand factors are various elements that a ect the demand for a product or service. They also

    cause the demand curve to either shi to the le or right. Some examples of demand factors are:

    price of the product or service, consumer income, popula on, consumer preferences and tastes,

    and availability and prices of subs tute or complementary goods.

    Supply factors are various elements that a ect the supply for a product or service. They also

    cause the supply curve to either shi to the le or right. Some examples of supply factors are:

    produc on costs, technological advancements, government regula ons, natural factors (such as

    weather condi ons and natural disasters), and number of suppliers in the market.

    One possible demand factor that would cause an increase in the world food prices is popula on

    growth. An increase in popula on is followed by an increase in demand for food. Since the

    number of people grew, more people have to split the same amount of food (assuming that the

    produc on (supply) of food stayed the same). Therefore, the demand increases.

    Figure 2. Increase in food prices - Supply


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    Figure 1. Increase in food prices - Demand

    The graph indicates that a shi of the demand curve to the right will cause an increase in price

    (assuming that the supply remains the same). The new equilibrium (Q1, P1) is set to the right of

    the original equilibrium point (Qe, Pe) at a higher price. As more people require food, the demand

    curve for food shi s to the right, causing prices to rise.

    On the supply side, one possible factor that could cause an increase in world food prices are

    natural condi ons. More speci cally, natural disasters, such as droughts, oods, or hurricanes.

    These natural disasters act destruc vely on agriculture by destroying or damaging elds,

    planta ons, etc., therefore, reducing the supply of food and crops. This shi s the supply curve to

    the le , leading to a decrease in the quan ty of food available in the market. With reduced

    supply and constant or increasing demand, prices tend to rise.

    The graph indicates that that a shi in supply to the

    le will cause an increase in price (assuming that the

    demand remains the same). The new equilibrium (Q1,

    P1) is set to the le of the original equilibrium point

    (Qe, Pe) at a higher price. As less food is available, the

    demand curve for food shi s to the le , causing the

    prices to increase.

    Figure 2. Increase in food prices - Supply


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