If an increase in the price of lemonade causes more people to sell lemonade, then it can be argued that the price increase
A)acted as a transfer price.
B)caused a redistribution of income.
C)caused a market failure
D)reduced competition.
E)acted as an incentive.

Question

Quizplus · Accepted Answer

An increase in the price of lemonade acting as an incentive makes the most sense because it encourages more people to sell lemonade, indicating that the potential profit from selling lemonade has become more attractive. The other options do not quite capture the idea of more people entering the market due to higher prices.

If an Increase in the Price of Lemonade Causes More