Question

Identify one determinant of demand that has influenced the price that you have recently purchased and how it influenced markets.

Answer 1

It is the income of the consumer

According to the theory of demand income of a consumer plays an important role in determining the market price and quantity given the supply of the product. An increase in income of the consumer will increase the demand for a normal good. This is going to increase the market price and the market quantity given the supply.

Recently most of the people have experienced a decline in their income due to the pandemic. For most of the normal goods such as clothing, movie tickets, dining, there has been a decrease in the demand because the income has reduced. This has resulted in decreasing their prices.