Business, 23.01.2020 03:31 izaiahfieods

Give an example of a situation in which a surplus of a product led to decreased prices. similarity, give a example of a situation in which a shortage led to increased prices. what eventually happened in each case? why?

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Answer from: oshagie

The situations where the surplus quantity of a product led to decreased prices are potatoes in Ireland, whereas shortage leading to increased prices can be explained with fuel prices.

The fuel prices are increasing globally day by day due to the shortage of fossils and crude oils, whereas potatoes are produced in abundance in Ireland due to the suitable conditions of growth.

Change in prices of productsPotatoes are produced in surplus in Ireland due to the suitable conditions and environment required for the growth of potatoes in the region, which has led to the prices of potatoes being extremely low. Shortage of crude oil globally has led to the increase of the prices of fuels like petrol and diesel, which are made from processing crude oil. The prices, thus, show an increase.

Hence, prices of potatoes in Ireland due to surplus and that of crude oil due to shortage are the two perfect examples that lead to the change in price of such commodities.

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Answer from: ryevins3

Give an example of a situation in which a surplus of a product led to decreased prices. similarity, give a example of a situation in which a shortage led to increased prices. what eventually happened in each case? why?

In the course of having surplus of a product which decreases the price, this happens as a result of high competition as there many people selling the same products which in turns leads to crash in price in order to make sales and little profit.

while product shortage or scarcity happens as a result of decrease in resources or decrease in supply, hence; results into scarcity of products which eventually aids increment of price

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