Supply and demand are powerful forces in a free market.In four to five sentences, explain some of the factors that cause shifts in supply and demand and what the effects of these shifts are.

Answer:

A shift in supply occurs when the amount of a good producers are willing and able to sell changes because of factors such as resource costs, technology, labor, or competition. A shift in demand occurs when the amount consumers are willing and able to buy changes because of factors such as income, population, prices of related goods, or consumer tastes. An increase in supply usually lowers prices and increases the quantity sold, while a decrease in supply raises prices and reduces quantity. An increase in demand usually raises both prices and quantity, while a decrease in demand lowers both.