Answer to Question #219994 in Microeconomics for CASHAY

Question

“Fifty percent of cut roses sold in February are sold on Valentine’s Day. On Valentine’s Day in a recent year, the price of a dozen roses jumped from $8.00 to $19.99 at one local store in Chicago. Another bestseller on Valentine’s Day is candy. About 13 percent of the annual sales of candy take place on Valentine’s Day. Yet the price of a box of chocolates increases modestly if at all on this holiday.” Can you explain why this happens? 

Answer 1

1) Market for roses: The Demand curve is more elastic and the Supply curve is more inelastic.

2) Market for chocolates: The Demand curve is more inelastic since consumers don't cut back when prices rise while the supply is also inelastic.