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:

Supply shifts when factors such as production costs, technology, or the availability of labor and resources change. Demand shifts when consumers’ incomes, tastes, expectations, or the number of buyers change. An increase in supply usually lowers the equilibrium price and increases the quantity sold, while a decrease in supply usually raises the price and lowers the quantity. An increase in demand usually raises both the equilibrium price and quantity, while a decrease in demand usually lowers both.