Select a good that you are familiar with. What are the factors that shift the demand curve for this good? What are the factors that shift the supply curve for this good? How do you expect the supply and demand of your selected good to change in the next year? Relate your expectation to price and quantity.
Let's choose oranges. There are common demand and supply shifters.
Demand shifters • Changes in disposable income • Changes in tastes and preferences - tastes and preferences are assumed to be fixed in the short-run. This assumption of fixed preferences is a necessary condition for aggregation of individual demand curves to derive market demand. • Changes in expectations. • Changes in the prices of related goods (substitutes and complements) • Population size and compositio-Resource Prices: an increase in the price of a resource will decrease the supply and vice versa
Supply shifters • Technology: an increase in technology will increase supply • Taxes and Subsidies: an increase in taxes (which are a cost to a Business) will decrease supply. A subside (taxes in reverse) will increase supply • Price of other goods: When the price of other "interchangeable" goods increases there will be a decrease in our goods. This due to a substitution in production. • Producer expectations: If suppliers are expecting prices to increase they may hold back some current product, thus decreasing supply • Number of sellers: an increase in the number of suppliers will increase supply and vice versa. As for the expectations for the next year, there may be a decrease in demand due to the abnormal weather this year in some countries-exporters of oranges, so the price for them may increase a little, as there may be small shortage of this good.