Question

Suppose you sell surfboards for a living, and you expect the price of surfboards to increase at the same rate as inflation; you adjust your prices accordingly. If this does not occur, then it must be true that:

Answer 1

the relative price of surfboards is changing.

Step-by-step explanation:

Suppose you sell surfboards for a living, and you expect the price of surfboards to increase at the same rate as inflation; you adjust your prices accordingly. If this does not occur, then it must be true that: the relative price of surfboards is changing.

Relative-price changes arise in market economies as individual prices adjust to the flow of the supply and demand for various goods. Relative-price movements say alot about the scarcity of particular goods and services