Almost every holiday season at least one gift idea achieves fad status. When that happens, prices tend to increase dramatically. Why?

Question

Quizplus · Accepted Answer

When a gift idea becomes a fad, everyone wants it, and the demand exceeds the supply. Prices rise as sellers take advantage of the situation and try to capitalize on consumers' enthusiasm. The higher prices then create a scarcity of the product, further increasing demand and prices. This cycle can continue until the fad fades, and prices go back down.

Almost Every Holiday Season at Least One Gift Idea Achieves