If the price of ice in a hurricane-devastated area suddenlyskyrockets, 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.(True Answer )Correct
D)have an incentive to direct ice to its highest valued uses.

Question

Quizplus · Accepted Answer

If the price of ice suddenly skyrockets in a hurricane-devastated area, then it is likely that the demand for ice has increased drastically due to a lack of functioning refrigeration and air conditioning. In response to this increased demand, suppliers will ship more ice to the area to take advantage of the high prices. As the supply of ice increases, the price will fall until it reaches a new equilibrium where the supply of ice matches the demand at a reasonable price. This is a basic example of the market forces of supply and demand working to establish a fair price for a scarce resource in a crisis situation.

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