why do prices increase when demand for a product is high?\no companies know they can make more money by…
why do prices increase when demand for a product is high?\no companies know they can make more money by selling fewer products at higher prices.\no companies know that people will be willing to spend more to get an in - demand product.\no companies take advantage of the demand to make people spend more money on excess products.\no companies know they can stop production and still make money on sales.
Answer
Brief Explanations:
In a market - based economy, when demand for a product is high, consumers are more eager to obtain it. Companies recognize this willingness to pay more among consumers and thus raise prices to maximize profits.
Answer:
Companies know that people will be willing to spend more to get an in - demand product.