Question

Think of a substantial product you regularly purchase, such as video games or jeans. If supply is high and

demand is low, what happens to the cost? How might that affect someone's income? Likewise, if supply is low
and demand is high, what happens to the product's cost? How might that affect someone's income?

Answer 1

See below

Step-by-step explanation:

1. When the supply is high, and demand is low, an item's cost will probably come down. High supply with low demand creates a surplus in the market. Seller will offer the lowest prices possible to woe buyers.

When an item's prices go down, buyers will spend less money buying the product. The buyer saves some money, which is equivalent to having more income than before.

2. With a low supply but high demand, prices tend to go up. There will be great competition for the few goods from the many buyers. As a result, suppliers will hike prices and make more profits.

An increase in prices forces buyers to spend more money to buy the same commodities. Their disposable income decrease, which is the same as having a reduced income