Microeconomics:
4th Edition
ISBN: 9781464143878
Author: Paul Krugman
Publisher: Worth Publishers
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Question
Chapter 3, Problem 3P
To determine
The market for many goods changes in predictable ways according to the time of year, in response to events such as holidays, vacation times, seasonal changes in production, and so on. Using
- Lobster prices usually fall during the summer peak lobster harvest season, despite the fact that people like to eat lobster during the summer more than at any other time of year.
- The price of a Christmas tree is lower after Christmas than before but fewer trees are sold.
- The price of a round -trip ticket to Paris on Air France falls by more than $200 after the end of school vacation in September. This happens despite the fact that generally worsening weather increases the cost of operating flight to Paris, and Air France therefore reduces the number of flights to Paris at any given price.
Concept Introduction:
Demand: The demand is defined as the ability to pay for goods and services.
Supply: The supply is the ability of the seller to produce the goods and services and sell it at the prevailing price.
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