Excerpts from “The Economics of
the Rose Market,” by Don Matthews: Some of you may have experienced the same
thing this past Valentine’s Day.
of love, romance, and of course, the market process. Why are rose prices so
high on Valentine’s Day? Ask the lovers-the consumers-they say the florists.
Ask the florists, and they will say it’s the wholesalers. Ask the wholesalers,
and they will say it’s the growers. Ask the growers, and they say it’s the
Day is the most popular rose day of all, more than 60% of the roses Americans
buy during the year are bought for three days: Valentine’s Day, Mother’s Day
Day is by far the most popular, accounting for 1/3 of all a rose grower’s
annual sales. This is almost 130 million roses for one day. Roses can’t be
cranked out like hamburgers or oil changes. Roses require time, care, warmth
and sunlight. According to Roses Incorporated, commercial rose growers in the
U.S. operate nearly 900 acres of greenhouse areas at a capital investment of
about $1 million per acre.
- What or Who is the real reason behind the
price hike of roses on this holiday?
- The gigantic demand for roses creates a
gigantic demand for what types of resources?
- Given these resources are not free, they cost
the grower, how are producers able to recoup these costs?
- How would you categorize the market for
roses, (perfect competition, monopolistic competition, oligopoly or a
monopoly?) Justify your answer.
Each answer must contain at least 50-100 words to be considered complete. No plagiarism (I will be checking once answer is received). Please don’t overbid, for this is an easy assignment if you know and understand economics.