Which of the following situations could be considered examples of
a. A deadly tornado strikes Oklahoma City, destroying the homes of 50% of its population. Immediately afterward the price of sleeping bags increases by 150%.
b. The exchange rate between U.S. dollars and the Papua New Guinea kina increases sharply as the Summer Olympics in Paris, France, approach.
c. A new model of sunglasses become the hottest overnight fashion trend after several movie stars wear them to the Academy Awards. As a result, producers increase their price by 300%.
d. At what level would you expect prices to settle during a period of price gouging?
The price would settle
the pre-gouging market price.
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