Respuesta :
The correct answer on Edg. is:
B.) Companies know that people will be willing to spend more to get an in-demand product. :)
The companies increases the price when demand for a product is high because they companies know that people will be willing to spend more to get an in-demand product.
How Does the supply and demand affect prices?
An economic theory called the law of supply and demand describes how supply and demand are connected to one another and how this relationship impacts how much products and services cost.
A basic rule of economics is that when there is more supply than demand for an item or service, prices decline. Prices typically increase when demand outpaces supply.
When demand is constant, the connection between supply and pricing of products and services is inverse. Prices often decline to a lower equilibrium price and a greater equilibrium quantity of goods and services when the supply of goods and services increases while the demand for those goods and services stays constant.
Prices often increase to a higher equilibrium price and a lesser quantity of goods and services when the supply of goods and services declines while the demand for those goods and services stays constant.
The demand for products and services has the same inverse connection. The increased demand, however, results in a higher equilibrium price, and vice versa, when supply is constant but demand rises.
Price increases for goods and services can have marketing and financial implications. From an economic perspective, higher costs typically result in reduced consumer demand. However, businesses frequently consider both internal and external issues before raising pricing.
To compensate for rising operating costs, businesses frequently increase the pricing of the goods and services they offer. For instance, a product reseller may raise prices only as a result of its supplier raising costs for raw materials or completed items. Increased fixed expenses like building rental charges and electricity bills may be incurred by both service providers and sellers of goods. Businesses frequently need to adapt when expenses rise in order to preserve profitability.
In competitive sectors, providers frequently follow trends as well. Therefore, the choice of one business to raise prices can simply reflect higher pricing across the board in the sector. More competition frequently prevents an industry's prices from rising. However, a single supplier or the sector as a whole may experience price rise development due to new technology or improvements in product advantages. Customers essentially benefit more from the advancements, therefore businesses charge more.
To learn more about supply and demand refer
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