Answer to Question #72140 in Microeconomics for Mbee
Explain how both demand and supply side factors are likely to affect the price of rail tickets in the UK. 16 mark answer, Do I talk about the equilibrium price?
An increase in population, average income, price of substitutes, people commuting to work, the demand curve for railway tickets will shift to the right, an increase in demand.Equilibrium rail ticket prices increase.A decrease in population, average income, price of substitutes, less people commuting to work, demand curve for railway tickets will shift to left, a decrease in demand. Equilibrium rail tickets prices decrease. An increase in tax, fuel prices, staff salaries, electricity costs and a lack of subsidies, the supply curve to shift to the left, the supply for railway tickets decrease due to an increase in production costs, equilibrium price increase.