I need an explanation for this Economics question to help me study.
Please tell us about a price that you think is too high or too low. Keeping in mind what we learned in this chapter, that the price is the result of the interactions of supply and demand, please use supply and demand to explain why the price is strange, and what causes it to be so.
Here is an example of great work:
Every summer I notice that the price of tomatoes falls. I figure that this is because tomatoes grow best in summer, although they can be grown in greenhouses year-round. This would be modeled by a rightward shift in the supply curve. At the same time, I think demand for tomatoes probably increases in the summer as well since people tend to eat more salads and lighter foods in the summer -this would be a rightward shift in demand. Since both curves are shifting right, but I observe the price falling, it must be that the shift in supply is greater than the shift in demand for tomatoes in the summer. Since both demand and supply are shifting to the right, but the price falls, it must be that the shift in supply is greater than the shift in demand.