Question

Indicate which letter below correctly identifies things that can be non-price determinants of demand, things that can be non-price determinants of supply, and things that can be non-price determinants of both.

1.tastes and preferences.

2.income.

3.production technology.

4.future expectations.

5.production costs.

		A. Non-price determinants of demand: #2, #3;   Non-price determinants of supply: #4, #5;   Non-price determinants of both demand and supply: #1
		B. Non-price determinants of demand: #1, #2;   Non-price determinants of supply: #3, #5;   Non-price determinants of both demand and supply: #4
		C. Non-price determinants of demand: #4, #5;   Non-price determinants of supply: #1, #2;   Non-price determinants of both demand and supply: #3
		D. Non-price determinants of demand: #1, #2;   Non-price determinants of supply: #3, #4;   Non-price determinants of both demand and supply: #5

Answer 1

Indicate which letter below correctly identifies things that can be non-price determinants of demand, things that can be non-price determinants of supply, and things that can be non-price determinants of both.

1. Tastes and preferences.

2. Income.

3. Production technology.

4. Future expectations.

5. Production costs.

B. Non-price determinants of demand: #1, #2;   Tastes and preferences and Income of the consumers are the non-price determinants exclusively of demand. Non-price determinants of supply: #3, #5;   Production technology and Production cost are the non-price determinants exclusively of supply. Non-price determinants of both demand and supply: #4 Future expectations are common to both supply and demand and also it is a non-price determinant.