ECO 1000 Lecture Notes - Lecture 33: Shortage, Invisible Hand, Demand Curve
Document Summary
The red jacket mountain view inn in new hampshire charges per room in the winter ski season and during the summer months. The number of rooms and operating costs are constant year round. Which of the following best explains the price difference? there is a rightward shift in demand in the winter. The law of demand is simply a reflection of the basic principle of economics: incentives influence behavior in a predictable fashion. The price of a good will tend to rise when there is excess demand for the good. Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. The inverse relationship between the price of a good and the quantity demanded. An increase in the demand for tattoos will lead to a higher price and a larger quantity sold. Competition is present and buyers and sellers are free to choose mutually agreeable prices.
