Final answer:
Price erosion is influenced by several factors including increased competition, market saturation, changing consumer preferences, technological advances, economic conditions, and purchasing power. In the financial market, both a fall in demand and a rise in supply will lead to a decline in interest rates, as lenders compete for borrowers.
Step-by-step explanation:
The primary factors that have been driving the price erosion are increased competition, market saturation, changes in consumer preferences and demand, technological advancements leading to cost reduction, economic downturn, and reduced purchasing power. Factors such as changes in demand, changes in supply, and a decrease in income levels can also influence product prices and interest rates in the financial market. An increase in the number of buyers or a decrease in the availability of related products can drive prices up, whereas an increase in the supply of money or loans and a decrease in the demand for them can lead to lower interest rates.
A fall in demand (option b) and a rise in supply (option c) in the financial market will lead to a decline in interest rates. Fewer borrowers mean that lenders cannot charge as much, and more available lenders create competition, which drives the rates down.