Roses are more expensive on Valentine's Day than at other times of the year, yet sales of roses are highest on that day. How does economic theory account for this?
A) An increase in demand pushes up the market clearing price of roses.
B) People buying the roses are irrational.
C) Roses are not subject to the law of demand.
D) Florists know that there are no substitutes for roses, so they take advantage of consumers on Valentine's Day.
A
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Assets which include foreign currencies and gold certificates that central banks use to maintain exchange rates in a predetermined range are called:
A) reserve assets. B) tangible assets. C) bank assets. D) discretionary assets.
Three manufacturing firms want to maintain their oligopolistic market power by tacitly colluding with each other. Which action helps them achieve this goal?
a. They create a cartel and sign a formal collusion agreement. b. They develop an implied price leadership understanding. c. They ease the barriers to entry in their industry. d. They hold formal meetings to discuss pricing strategies.