Factual:  

1) What influences supply & demand in a market?

The things that influence supply and demand in a market are called “Non-Price Determinants”. Non-Price Determinants are basically anything apart from the price of a product, that affects the supply or demand in a market. Examples of Non-Price Determinants are: Screen Shot 2015-11-05 at 9.35.36 am

Examples of how the non-price determinants affect the demand in a market are:

Ice_Cream_dessert_02

Market – Ice Cream

Increase in Demand: If consumers are all getting raises in their salary (income of customers), then they will be able to buy more ice cream, thus increasing the demand.

Decrease in Demand: If the price of ice cream cones (complimentary good) increase, then the demand will decrease as less people want to buy the ice cream as the cones are more expensive.

Examples of how the non-price determinants affect the supply in a market are:

Market – Ice Cream

Increase in Supply: If the government is providing Ice-Cream manufacturers with subsidies (Subsidies and Taxes), then manufacturers of ice cream will be able to decrease their costs of production and will therefore be able to increase their supply of ice cream

Decrease in Supply: If a substitute good like pudding is making more than ice cream, then more producers of ice cream will decide to make pudding instead of ice cream (Size of Market). As their are less ice cream producers to produce ice cream, there will be a decrease in the supply of ice cream.

2) How can economic sectors relate to each other?

There are 4 economic sectors, PrimarySecondary,  Tertiary, Quaternary

They each relate to each other, because each sector supports the other sectors. The primary sector supplies the secondary sector with the raw materials they need to produce the goods that they create. The secondary sector provides the other sectors with the goods they need to stay in operation. The tertiary sector provides services to the community, through the use of goods and materials and planning of the other sectors. The quaternary sector provides special services to the other sectors, that supports the societies infrastructure.

Conceptual:

3) What path do raw materials take to consumers?

Raw materials start as natural materials which are then collected and transported to a factory. This is where these materials are then moulded into the product itself , or goes through a complicated process to become the product that we need/want it to be. Then the products are delivered to supermarkets, daily goods shops, retail stores, etc. where they then get bought by consumers (us) and taken back home to use.

4) How is equilibrium reached in a market?

Equilibrium is reached in a market when the quantity supplied is equivalent to the quantity demanded. However, this can change if the quantity supplied, quantity demanded or price increase or decrease due to the non-price determinants listed above.

 

5) How is price determined in a market?

Price is determined in a market based on whether the quantity supplied or quantity demand increase or decrease. If the quantity supplied increases, then the price will fall as to make a profit and to disperse the excess supply. However if the quantity supplied decreased then the prices will increase as to disperse the excess demand.
Debatable:

6) To what extent do companies compete indirectly with each other?

Companies compete indirectly with each other to fulfil the needs of the same market and to make the same product. However, companies that do not compete indirectly do not have the same goals as other competing company. For example, theatre movies indirectly compete with online streaming websites. Theatre movies want people to pay the producers money to cover the costs of filming. However online streaming websites provide these movies for free at a later date, with the goal of getting sponsors/ads to pay the costs of running such a website.