Question

Question 3

In May 2017, the price of olive oil rose by more than 10%. This was caused by a drought in Greece, Italy, Spain and Tunisia, the
major producing countries. Global supply was forecast to fall by 14% in 2017. Demand for olive oil fell in Europe, but rose in a
number of other countries including Australia, Brazil and China. Some basic food items, including bread and rice, are taxed in
some countries but are subsidised in other countries.
Analyse why the demand for a product may be higher in one country than in another country.

Answer 1

Demand is the quantity of a good or service that consumers are willing and able to buy at a given price in a given time.

Firstly, a country may have a larger population than another, hence there might be more potential buyers, which will increase the demand of the product in that country.

The demand for a product may also be higher in one country than in another country depending on their taste and preference, for example people from Japan are more likely to buy sushi than people in Indonesia are since it’s a national dish in Japan.

Lastly, the product could be cheaper in some countries compared to the other. For example rice has demand in India compared to Norway. This is because there is more rice available in India than there is in Norway, making the rice in India cheaper.