Recall the application of the upward jump and downward slide of wine prices,what can you determine from the price soared for the pinot noir wine grown in the Willamette Valley in Oregon and for other brands the price tripled?

Question

Quizplus · Accepted Answer

The fact that the price tripled for pinot noir wines from the Willamette Valley and other brands suggests that in the short run, the supply of wine is inflexible. This means that producers are unable to quickly increase production to meet the sudden increase in demand, leading to a significant increase in price. A unit elastic demand would mean that the quantity demanded remains constant even as prices increase or decrease, which is not the case here as prices have significantly increased. The fact that prices soared also suggests that consumers may be willing to pay higher prices for certain types of wine, disproving option A. Option B may or may not be true, as insufficient information is provided about the production capabilities of the producers.

Recall the Application of the Upward Jump and Downward Slide