F.3 Demand & supply

F.3 Ans.

With a marked drop in temperature of HK / cold weather in HK,
people tend to have hot drinks sold in restaurants.

Demand for the hot drinks sold in restaurants then increases
Both the price and quantity transacted increase.

Quatity transacted of hot drinks sold in restaurants will be increased but the impact on the price is uncertain. Accordingly to the theory of supply and demand, a rise in demand will push up the price subject to the condition that the supply remains unchanged. In general, restaurants can easily increase the supply of hot drinks. Unless there is another factor affecting the supply of hot drinks, price will most probably remain at the same level.

cold spell cause demand of hot drinks to increase.
so the price for the hot drinks will increase. The quantity transacted will also increase.