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Supply and Demand - Rochester Ice Storm

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In 1991, Rochester, New York, had a serious ice storm. Electric power was out in houses for days. The demand for power generators increased dramatically. Yet the local merchants did not increase their prices, even though they could have sold the units for substantially higher prices. Why do you think that the merchants adopted this policy?

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Solution Summary

Supply and demand is emphasized in this solution, including analysis as to why the merchandisers didn't increase their sales price even though demand was high. 164 words.

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Even though the demand was higher due to the ice storm, it was important for merchants to show care and concern for the people of Rochester. If one merchant had raised their prices and the rest had not, ...

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