Nick has seen the price of sugar, a commodity he uses, increase - Edexcel - GCSE Business - Question 8 - 2016 - Paper 1
Question 8
Nick has seen the price of sugar, a commodity he uses, increase.
Which two factors are the likely causes of this increase?
Select two answers.
A Lower demand for ... show full transcript
Worked Solution & Example Answer:Nick has seen the price of sugar, a commodity he uses, increase - Edexcel - GCSE Business - Question 8 - 2016 - Paper 1
Step 1
B Bad weather reduces the sugar harvest.
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Answer
Bad weather conditions can severely impact the yield of sugar crops. If the harvest is reduced, supply will decrease, potentially leading to an increase in the price of sugar.
Step 2
D Farmers increase sugar production.
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Answer
If farmers anticipate a rise in prices due to increased demand or lower supply, they may increase sugar production. However, this can also indicate they are trying to capitalize on high prices, resulting in an increase in sugar availability which could stabilize or reduce prices in the long run.
