Nick has seen the price of sugar, a commodity he uses, increase - Edexcel - GCSE Business - Question 8 - 2016 - Paper 1
Question 8
Nick has seen the price of sugar, a commodity he uses, increase.
Which two factors are the likely causes of this increase?
Select two answers.
A Lower demand for ... show full transcript
Worked Solution & Example Answer:Nick has seen the price of sugar, a commodity he uses, increase - Edexcel - GCSE Business - Question 8 - 2016 - Paper 1
Step 1
B Bad weather reduces the sugar harvest
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Answer
Bad weather can directly affect the sugar supply by reducing the quantity of sugar that can be harvested. This supply shock typically leads to an increase in prices due to scarcity.
Step 2
D Farmers increase sugar production
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Answer
If farmers increase sugar production, it may initially indicate a potential increase in supply. However, if this increase does not meet demand or if unexpected factors limit supply, it could also lead to price increases.
