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Pricing Decision for a Hat Seller
A new hat seller enters a market where the supply curve is an upward-sloping line starting at a price of $2, and the demand curve is a downward-sloping line connecting the points (0 hats, $20) and (40,000 hats, $0). The established market price, where the quantity of hats people want to buy exactly equals the quantity sellers want to sell, is $8, with 24,000 hats being exchanged. The new seller is considering setting their price at $12 to try and make more profit per hat. Based on the market conditions described, what is the most likely outcome for this seller's inventory, and why?
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Pricing Decision for a Hat Seller
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