Name: BAUTISTA QUISPE GIOVANA

SUPPLY AND DEMAND

Answer these questions, basing your answers on the text.

1. What are perishable goods?

R.- We mean goods which cannot be stored for any length of time without going bad

2. What 2 things are usually the same in quantity?

R.- The supply of perishable products and the stock of perishable products

3. What happens when the Law of Supply operates?

R.- The quantity supplied is directly proportional to the price of the good

4. What does a rise in prices encourage?

R.- In which a rise in prices tends to increase supply

5. What serious effect may a fall in prices have on some producers?

R.- Producers will reduce production. this can result in serious difficulties for many

producers and may cause them to go out of business completely

6. What can over-production lead to?

R.- Over-production of any commodity can also create difficulties, because it can lead to a

glut on the market, whitch may cause prices to fall scharply

7. What happens when the supply of a commodity is adjusted to suit market conditions?

R.- This means that changes in prices lead to changes in the quantity of a particular

commodity which is made available to consumers

8. What is meant by ‘elastic’ supply?

R.- Because it can be increased or decreased rapidly in response to market prices