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How will an increase in car ownership lead to more demand for oil?
Wiki User
∙ 11y ago
More cars on the road require more gasoline. Gasoline is refined from crude oil. The more gasoline needed the more crude oil needed to produce it.
Wiki User
∙ 11y ago
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How the increase in expansion affect the demand?
Increase in expansion affect the demand because more supply/expansion with constant demand will lead to excess in expansion which affect the demand.
In a perfectly competitive market an increase in demand will in the long run generally cause?
An increase in demand in a perfectly competitive market will lead to an increase in revenue for the business. The more they sell the more they will make.
What of these is most likely to lead to an increase price of a company's stock?
Answer : Its profits increase. Explanation : When a company is more profitable, it's stock is in higher demand, and higher demand means a higher price.
List and explain two different factors that can change demand that is not related to price?
An increase in income would change a person purchasing power. This would lead to an increase in demand for normal goods. Normal goods are goods that you would buy more of the greater your income is. An increase in population would also increase demand as there are now more people in the market to buy the goods.
Find at least two specific current examples of non-price determinants that shift demand in the market?
There are a number of non-price determinants that can shift demand in a market. Some of the most common include changes in income, changes in prices of complementary or substitute goods, changes in consumer tastes or preferences, and changes in the number of consumers in the market. For example, an increase in income will lead to an increase in demand for most goods and services. This is because as consumers have more money to spend, they are able to purchase more of the things they want and need. A change in the price of a complementary good, such as a decrease in the price of gasoline, will also lead to an increase in demand for automobiles. This is because consumers will have more money to spend on automobiles if the price of gasoline is lower. Similarly, a change in the price of a substitute good, such as an increase in the price of coffee, will lead to a decrease in demand for tea. This is because consumers will substitute coffee for tea if coffee becomes relatively more expensive. Finally, changes in consumer tastes or preferences can also lead to changes in demand. For example, if more consumers become interested in healthy eating, there will be an increase in demand for fruits and vegetables. Conversely, if more consumers become interested in fast food, there will be an increase in demand for hamburgers and fries.
How are prices determined in a well functioning economy?
By simple supply and demand theory. The more demand, or the less supply, will lead to higher prices. The less demand, or more supply, will lead to lower prices.
A graph example of supply increase without changes in demand?
If a seller increase supply without changes in demand, his business will not last. He will have more supply than demand.
What the cause of demand pull inflation?
Consumers want more and more goods and services. Stronger consumer demand for goods with a limited or fixed supply. A price level increase due to an increase in aggregate demand.
How can rapid growth lead to cash flow problems?
rapid growth will increase the cost of the firm, with rapid growth the company needs to hire more staff due to the increase of pressure in order to manage andorganizeeverything. buying more materials as the demand grows.If the firm expands the pressure will increase leading to diseconomicsof scale.-staff will feel demotivate due to lack of communication.-rapid growth may lead to shortfalls in working capital.-costs will increase with demand (fixed and variable costs).-Rapid growth usually requires significant infrastructure investments, which may lead to cash flow problems.
What is a good that consumers will demand more of when their income increase?
food
What will happen to the equilibrium price level and real GDP if aggregate demand and aggregate supply both decreases?
AD INCREASES AS DECREASES As the AD/AS model exhibits (exactly the same as Demand and Supply model except Price Level instead of Price and output or real GDP instead of quantity) an increase in AD leads to an inrease in both price level and output. Imagine if there is an increase in demand for tomatoes. According to demand and supply the price of tomatoes will increase. Expand this on a macro scale. When the Aggregate demand for goods and services increase, this pushes the price up. Also in response to this increase in demand, producers will produce more of the good to take advantage of the increased demand, leading to an increase in real GDP. If AS decreases, goods become more scarce and as long as demand is fixed, the price will increase. 'WE PAY MORE MONEY FOR RARE THINGS'. Furthermore, because there is less supply output will decrease. Putting these effects together, both will lead to an increase in price level. The effect on output depends on which force is larger.
What is the result of an increase in a normal good?
To meet the price for more demand causing increase population and businesses
