Answer to Question #27344 in Macroeconomics for Jimmy Vo
There are common demand and supply 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
• 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.
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