Provide THREE reasons to explain this seeming contradiction.

Question

In the winter, which is the peak season for winter coats, the price of winter coats is typically higher than it is in the summer. In the case of strawberries, however, the reverse is true: The price of strawberries is lower in the peak season than it is in the winter season.

Provide THREE reasons to explain this seeming contradiction.

Ensure that you define any key terms used in your discussion.

Answer 1

In the winter, the coats are in higher demand.

Businesses take advantage of this by raising the prices.

However, a PRICE INCREASE also causes a DECREASE

in the demand which in turn will result in lower prices.

 

Merchandise sitting on the shelf will get marked down.

 

Strawberry season is also in the winter, not the summer.

The demand for strawberries increases in late winter and

early spring, not the summer. The price will sharply increase

and the fall to equilibrium price.