Answer to Question #307296 in Microeconomics for Dave2718

Question

Seasonal goods are goods that are consumed in larger quantities during some seasons than in other seasons, e.g. strawberries or hotel rooms near a beach during summer. While the price for strawberries is lowest during their season of highest consumption the price for hotel rooms near the beach is highest during their season of highest consumption. Explain why.

Answer 1

The demand for seasonal goods is high during the season. When the demand rises,and prices increases people will tend to consume little of seasonal goods. This is because when the price increases, people are willing to supply more and demand less and vice versa when the price falls.