If the price of ice in a hurricane-devastated area suddenly skyrockets, then ice suppliers will:
A) enjoy high profits at the expense of consumers.
B) limit the supply of ice in the area to sustain the skyrocketing price.
C) ship more ice to the area and the price will fall.
D) have an incentive to direct ice to its highest-valued uses.

Question

Quizplus · Accepted Answer

When the price of ice skyrockets, suppliers are incentivized to ship more ice to the area to take advantage of the high prices, which will eventually lead to an increase in supply and a decrease in price.

If the Price of Ice in a Hurricane-Devastated Area Suddenly