Question

Problem 3a

Answer 1

Introduction

A variety of variables influence a global commodity's demand and supply.

• The price of a commodity is one of the most important factors of demand and supply.
• Demand is inversely proportional to price, but supply is proportional to price.

In other words, when the price of an item rises, demand decreases while supply increases. Similarly, when the price of a commodity declines, demand grows while supply decreases.