Just before Valentine's Day, the price of roses increases dramatically. This is because
a. self-interested individuals try to charge more for a good than consumers are willing to pay.
b. demand increases while the supply of roses remains relatively constant.
c. the supply curve of roses is highly elastic.
d. the demand for roses is relatively inelastic most of the year, but becomes more elastic as demand increases.
B
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Mike’s Mealbarn is a competitive firm in the hot dog stand business. How will each of the following affect the short-run demand for labor at Mike's?
(i) Mike buys a new grill that makes the cooks more productive. (ii) Increasing numbers of people become vegetarians. (iii) A health inspector fines Mike $500 for unsanitary conditions, but fortunately Mike's customers don't learn about it.
Suppose that at the prevailing euro-dollar exchange rate there is an excess demand for dollars. To stabilize exchange rates, the United States might
A. Reduce government spending. B. Raise taxes. C. Raise interest rates. D. Decrease trade restrictions on euro-priced goods.