Question #68177
equilibrium price of ice cream is 2euro per scoop, how would the market get to equilibrium if the price were originally 1euro per scoop?
Expert's answer
The quantity demanded goes down when the price goes up. Therefore, sales will decrease after the price rise.
If this ice cream has significant competitive advantages, demand fall will not be very significant and possibly will get back to the initial figures soon.
But if there are a lot of similar products on the market, demand will fall irreversibly.
If this ice cream has significant competitive advantages, demand fall will not be very significant and possibly will get back to the initial figures soon.
But if there are a lot of similar products on the market, demand will fall irreversibly.
