Question

In the mid 1990s, caviar sales soared as did its price. The Petrossian boutique in New York which serves the upscale fare says it has raised its price in reaction to a renewed interest in the food coupled with a shrinking supply of Russian caviar following the collapse of Soviet Communism. Given these facts, what most likely led to the higher quantity sold and higher price of caviar?

a) Increased demand and decreased supply
b) Decreased demand and increased supply
c) Increased demand and increased supply
d) Decreased demand and decreased supply

Answer 1

The higher quantity sold and higher price of caviar in the mid-1990s can be attributed to increased demand and decreased supply.

Step-by-step explanation:

The higher quantity sold and higher price of caviar in the mid-1990s can be attributed to increased demand and decreased supply. The renewed interest in caviar coupled with a shrinking supply of Russian caviar after the collapse of Soviet Communism led to an increase in demand. At the same time, the decrease in the supply of Russian caviar contributed to the overall decrease in the availability of caviar in the market, leading to higher prices.