The demand for lobsters is lower in the spring than in the summer. If the price of lobster is higher in spring than in summer then

a. there are more substitutes for lobster in summer than there are in spring.

b. there is a shortage of lobsters in spring and a surplus of lobster in summer.

c. the supply of lobster is greater in summer than in spring.

d. consumers' tastes for lobster are greater in spring than in summer.

Question

Business

Mohammad Fleming

17 February, 10:10

The demand for lobsters is lower in the spring than in the summer. If the price of lobster is higher in spring than in summer then

a. there are more substitutes for lobster in summer than there are in spring.

b. there is a shortage of lobsters in spring and a surplus of lobster in summer.

c. the supply of lobster is greater in summer than in spring.

d. consumers' tastes for lobster are greater in spring than in summer.

+5

Answers (1)

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Patrick Townsend · Answer 1

C. Supply of lobster is greater in summer than in spring.

Explanation:

Demand & supply refer to consumers & producers ability & willingness to buy & sell at given prices respectively.

Demand curve is downward sloping, supply is upward sloping - due to law of demand & law of supply.

Market Equilibrium is where Demand = Supply & the curves intersect. Decrease in demand (Lobsters spring case) generally creates excess supply which leads to competition among sellers and reduces the prices. However if price is increasing despite of demand decrease (Lobsters spring case), the excess supply due to demand shortage would not have happened due to c) lesser supply in spring. So, decrease in demand off set by decrease in supply also in spring would have led to lobsters' higher price despite of lower demand in spring.