Question: Sometimes you see in advertisements statements like ... only 3 units remain in stock... or, as in booking.com, only 4 rooms left at this price...
Sometimes you see in advertisements statements like "... only 3 units remain in stock..." or, as in booking.com, "only 4 rooms left at this price..." and similar statements. Which effect do you think this has, if at all? Is it an effect on the supply side of the market (producers) or the demand side (consumers)? If the effect materializes, is it going to be a movement along the (supply or demand?) curve, or is it a shift of the respective curve (and, if so, is it rightward or leftward shift).
Given your answers above, draw basic upward-sloping supply and downward-sloping demand curves (in the Q-P space), and illustrate the movements that you predicted above (if any), and state your prediction about possible changes in the price and quantity of the good or service that is being advertised.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
