Question

In: Economics

You are an orange seller. You observe that prices of oranges in other stores increase. Should...

You are an orange seller. You observe that prices of oranges in other stores increase. Should you try to get more oranges from farmers to sell? Explain briefly. (This question is related to a problem of inflation.)  

Solutions

Expert Solution

an orange seller when I am observing that the prices of oranges increase in the market then it means there is the existence of the law of supply which suggests that the quantity supply of the product increases when there is an increase in the price of the commodity therefore and I am of serving the price of the oranges increases in the market so definitely I will approach the farmers to supply more oranges so that I can sell more oranges in the market.
The price rise in the economy is also a case of the inflationary situation in the economy than demand-pull inflation is existing disinflation means the price of the commodity increases due to the excess demand from the side of the consumer in the economy and the benefit of demand-pull inflation directly goes to the seller of the commodity because seller always wishes to sell the goods at a higher price in the economy because the ultimate aim of a seller is to increase the profit of their products.
Up to a certain level, the inflation is got in the condo me when there is reasonable demand-pull inflation is existing but after a certain time it is difficult in the economy to maintain prices stability which is beneficial for a large number of consumers in the market, therefore, it is important to consider it as a short-term profit-making situation but in the long run, the continuous rise of the prices of the commodity will not happen there for every seller wants to grab the opportunity in the short run.


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