Question

You are an orange seller. You observe that prices of oranges in other stores increase. Should you try to get more oranges from farmers to sell? Explain briefly. (This question is related to a problem of inflation.)   

Answer 1

When you understand when the prices of oranges increased where oranges are considered as food products which are necessity goods. this means your total revenue increases only if the price increases and because the price of oranges in the other stores increase, their revenue increases. That is the reason why it is very important to understand now to increase your prices as well in line with that of other stores so that your revenue increases even though you sell less. Therefore you shouldn't try to sell more and rather sell less on the whole.