Question

The main reason for the high price of antiques is that:

Multiple Choice

• demand is relatively elastic and supply increases over time.

• supply is relatively elastic and demand increases over time.

• supply is relatively inelastic and demand increases over time.

• demand is relatively inelastic and supply increases over time.

Answer 1

Answer -

Supply is relatively inelastic and demand increases over time is correct.

Explanation -

In case of antiques the demand for these are very high and the supply is relatively inelastic or remains constant.Increse in demand doesn't successfully satisfied by limited supply.so this imbalance in demand and supply conditions of antiques in the market is the main reason for the high price of them.Because of inelastic or less quantity of supply these antiques are sold at high prices.