Think of a coke machine in terms of market economics

Reference no: EM13686877

Think of a Coke machine in terms of market economics, that is, as having supply and demand. (You may find it helpful to illustrate for yourself.) Suppose the supply curve is vertical to reflect that the machine gets refilled on some frequency, such as weekly. (In other words, price does not affect quantity supplied.)

1) What is the benefit to customers of price increasing in hot weather? (Tip: imagine you and another person walked up to a machine and there was only one can left in it.)

2) Which core (basic) question is being resolved by price increasing in hot weather in soda machines?

3) The prevailing system of machines having just a fixed price has what effect on pricing (causes the fixed price to effectively act as what) during hot weather?

Reference no: EM13686877

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