Supply and demand are powerful forces in a free market.

In four to five sentences, explain some of the factors that cause shifts in supply and demand and what the effects of these shifts are.

Some of the factors that cause a shift in the demand and supply curves are:
1. Income of the consumers
2. Change in consumers' preferences
3. Price of substitute commodities
4. Population

Sample Response: Shifts in supply and demand occur when the amount of goods available increases or decreases, or when the demand for a particular good increases or decreases. Shifts in supply can happen when consumers change their spending habits, when competitors produce similar goods, or when the availability of labor or resources changes. Shifts in demand occur when the price changes or when the number of people trying to buy the good changes. It can also happen when people's tastes change.