Answer to Question #147878 in Economics for hailey

Question

Auctions are sales where the items are displayed and sold to the highest bidder. One dayyou visit an auction in your town to observe the laws of supply and demand in action. The bidding begins with an black-and-white television set. The bidding starts low with an offer of $3.00. There are 15 bidders trying to place bids at this point.1. Why are there so many bidders?2. What is the name of this economic principle? The 15 bidders have driven the price up $27.00 . There are now only four bidders remaining 3. Why have so many bidders dropped out? The second to the last bidder drops out at $51.00, and the remaining bidder gets to buy the television for $51.00. 4. How did the large number of bidders attect the final price of the TV? Everyone at the auction that week observes that the old television sells for a high price.
5.According to the Law of Supply , what should happen next week?
6. After the Law of Supply takes effect , what will happen to the demand for and the price of old TVs at the auction ? Why ?

Answer 1

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