Martin has a clothing store and he has managed to get the only pair of sneakers that everyone wants to buy. How is he most likely going to price these shoes?
He will keep the price the same as his other shoes to be fair
He will lower the price since demand is very low and there is a surplus
He will raise the price since demand is high and supply is scarce
He will raise the price since demand is very low and supply is scarce
Question & Answer
How is he most likely going to price these shoes
1 Answer
Verified archiveHe will raise the price since demand is high and supply is scarce.
This is because when demand for a product is high and the supply is limited (in this case, only one pair of sneakers), sellers typically increase the price to maximize profits and reflect the rarity of the item. This pricing strategy is known as following the law of supply and demand.