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 three factors are the likely causes of this increase?
Select three answers.
A Lower demand fo... 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 lead to a reduction in the supply of sugar due to impacted harvests. With a decrease in supply, the price of sugar is likely to increase, as less sugar becomes available in the market.
Step 2
D Farmers increase sugar production
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Answer
When farmers increase sugar production, they likely anticipate higher prices in the future. However, if current demand remains unchanged, this factor may not directly lead to an increase in price at that moment.
Step 3
F Sugar farmers pay higher wages
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Answer
If sugar farmers are paying higher wages, their production costs increase. This additional cost may be passed on to consumers, leading to a higher price for sugar.
