BUS 210 WEEK1 DQ1 - that the demand for the few bananas is...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
A. Your friend has asked you why the price of bananas is higher during certain times of the year. Using what you have learned about the laws of supply and demand, explain to your friend how the market affects price. I would tell my friend that there are a number of reasons like; when the demand for bananas is high, the price goes up because the business is trying to make as much money as possible on the bananas, and when the demand for bananas is low, the price is low. Now, the grower is holding some form of an auction and the bidders are the various stores who have demanding customers who want the bananas. During the peak banana season, the farmer, who is swimming in bananas, opens up the bidding with lets say $1.00 per pound. Now, the stores, who want the bananas on their shelves, are bidding against each other, thus the price goes up. When there are only a few bananas left and all the customers want the last bananas shows
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: that the demand for the few bananas is very high, therefore the store can mark up the price to see customer is willing to barter their money for that precious fruit. “The demand curves downward from the left to the right.” (p.12, para. 4) On the other hand, when the store has won the bidding at the fruit auction, the supply, or numbers of bananas, is high. Therefore, the store can be lenient on the price. “The supply curve to slope upward, from left to right.” (p.13, para.2) The final sales price is determined through the supply and the demand of the bananas. When the supply and demand curves cross, at which point the competition of bidding will stop and the farmer and store have agreed on a price the store will sell the bananas, so the customers are satisfied with both, the supply and the price....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online