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    Supply and Demand Graphs: Watermelon Market

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    The demand for watermelons is highest during summer and lowest during winter. Yet watermelon prices are normally lower in summer than in winter. Use a demand and supply graph to demonstrate how this is possible. Be sure to carefully label the curves in your graph and to clearly indicate the equilibrium summer price and the equilibrium winter price. Hint: There will be two demand curves and two supply curves, one set for winter and another set for summer.

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    Solution Preview

    See the attached Excel sheet for the graph.

    Summer demand is higher than winter ...

    Solution Summary

    This solution uses a supply-demand graph to explain why watermelon prices are lower in summer than in winter, even though the demand for watermelons in higher in the summer.