Answer to Question #274803 in Management for ifra

Question

The business consists of all economic activities undertaken by human beings living in a society to mint money for their survival. However, small businesses in certain sectors have flourished during the COVID and have seen an uplift in high demand. For example, Small business owners with medical and technical expertise have offered their services in this period when there was a shortage of imported medical instruments in underdeveloped countries. Delivery services offering businesses have seen a boom in this time.

Required: After going through the aforementioned paragraph, briefly answer the following questions:

1. Why does demand for a product or service play a significant role in starting a new business? Give any two reasons.
2. Give any two major reasons giving boom to some of the local businesses during testing times such as COVID-19.

Answer 1

Supply and demand have an important relationship because together they determine the prices and quantities of most goods and services available in a given market.