Question

Which of the following is an example of supply and demand?

The shortage of a popular new toy drives the price up.



The price of labor increases at a manufacturing plant, so the product price is increased.



The two main manufacturers of a product illegally agree to raise the product's price.



A new government tax increases the price of the product.

Answer 1

The shortage of a popular new toy drives the price up can be deemed to be an example of supply and demand.

Step-by-step explanation:

• The correlation between supply and demand is governed by the flow established between the two.
• When the supply of the commodity is exactly equal to the demand for the commodity, there are no chances of fluctuations in the price.
• When the supply of the commodity falls short due to increased demand or otherwise, the price of the commodity is subject to increase.

Answer 2

The shortage of a popular new toy drives the price up is the epic example of supply and demand law.

Answer: A

Step-by-step explanation:

The Law of Demand and Supply

According to the theory of Supply and Demand, the product is the base. If the product is less, and demand is high, there will be a price hype in the market. On the flip side, if there is less demand and the production is high, then market price falls. The shortage of a product occur only when the demand is high or the production is less. In both the condition, the price of the product raises. Hence, the shortage of popular new toy driving the prices up is the epic example of Demand and Supply law.