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What are the factors that causes an increase (rightward or upward shift) in demand and supply...

What are the factors that causes an increase (rightward or upward shift) in demand and supply of Chocolate Bars and High End Luxury cars (Write down at least 5 points each for demand and supply?

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Answer #1

Following are the causes of rightward shift in the demand and supply for chocolate and luxury good:

Demand side:

  • Increase in the income of consumer.
  • Rise in the price of substitutes.
  • Future prices are expected to rise.
  • Positive and optimistic economic environment.
  • Economic support by the government.

Supply side:

  • Fall in the cost of inputs or raw materials.
  • Increase in the competition.
  • Government subsidies.
  • Low taxes.
  • Rise in the productivity of labour.
  • Rise in the technological development.
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