1. The market for many goods changes in predictable ways according to the time of year, in response to events such
as holidays, vacation times, seasonal changes in production, and so on. Using supply and demand, explain the
change in price in each of the following cases. Note that supply and demand may shift simultaneously.
a. Lobster prices usually fall during the summer peak lobster harvest season, despite the fact that people like to eat
lobster during the summer more than at any other time of year.
As summer is the peak lobster harvest season, the supply is high which results in lower prices. These lower prices
translates into higher demand by consumers as they can afford it more easily now.
b. The price of a Christmas tree is lower after Christmas than before but fewer trees are sold.
After Christmas the demand for Christmas trees is close to zero and hence that will drive the prices down for any
trees that are left unsold.
c. The price of a round-trip ticket to Paris on Air France falls by more than $200 after the end of school vacation
in September. This happens despite the fact that generally worsening weather increases the cost of operating
flights to Paris, and Air France therefore reduces the number of flights to Paris at any given price.
As the school vacations end in September, the demand for holidays is greatly reduced by families. Although the
