Over the last three years, Christmas tree prices have increased from an average of $35 per tree to over $75 per tree. How would

Question

2 years ago

7

a Christmas tree farm and the overall industry respond to the price change under the following circumstances

1 answer:

Brilliant_brown [7] · Answer 1 · 2022-11-12T06:19:35+03:00

The Christmas tree farm would respond by:

In the short run, producers are going to earn profits and also increase their supply of the product.

This is what usually happens whenever there is an increase in the prices of goods in the supply side of the market.

As the prices would go up, the producers would want to take advantage of the increases to make as much gain as they can from the market.

This is only short term profit. Therefore the supply is going to be inelastic. The demand is only going to available for a short while.