Question

Consider the case of a melon farmer when his crop will mature within a week and the market demand is high. The farmer cannot change quantity supplied by planting more melons. The farmer can only ration existing supply by raising the price. This is an example of the ____________ .

Answer 1

The correct answer is: market period.

Step-by-step explanation:

A market period defines a short period in which the supply of a good or service is fixed. This happens because of a different range of reasons mainly being product seasonality. As producers are unable to increase the supply, it remains stagnant even in front of significant changes in demand. Producers tend to control the supply of their stock by gradually increasing the product price.