Explains the

causes of fluctuating prices of goods and their effect

on trade.

- Number of Demands

- Political Situations

- Recent Invention

- Price of a substitute product.

Explanation:

- Number of Demands

As the number of demands increased, the price of the product tend to increase to. As Sellers will try to produce more goods in order to accommodate the demands

- Political Situations

If the good is produced in a country with unstable political situation, there will be less countries that willing to trade with that country. This tend to make the price of the goods in that country tend to increase.

- Recent Invention

If the new inventions are better than the previous product, the consumers will more likely to purchase the new ones over the old product. This will shift the trades to focus on the new product and the price of the old product will decrease.

- Price of a substitute product.

As The price of its substitute increase, the price of that good tend to decrease.