Author Question: Which of the following would indicate that price is temporarily above its market equilibrium? A) ... (Read 28 times)

KWilfred · **on:** Jul 1, 2018

Which of the following would indicate that price is temporarily above its market equilibrium?

A) There are a number of producers who are left with unwanted inventories.
B) There are a number of customers who are looking for a good but cannot find sellers.
C) New firms decide to enter the market.
D) The government must step in and impose a tax on the good.

Question 2

Explain whether you would expect the elasticity of supply to be highly elastic or inelastic for fresh cut flowers and why.

What will be an ideal response?

elizabethrperez · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

A

Answer to Question 2

The elasticity of supply is very inelastic for fresh cut flowers. These flowers are perishable and quickly become worthless. The seller will accept almost any market price.