Question

The local supermarket has set up huge towers of 12 pack sodas with a sign that reads "buy two get and get one free." What is happening to the market forces before the sale starts?

Demand (high or low)
Supply (high or low)
Price (High or Low)

Answer 1

Prior to the supermarket's sale, there is likely a high supply and low demand for the sodas, causing a decrease in market price and prompting the 'buy two get one free' offer to boost demand.

Step-by-step explanation:

Before the sale starts at the local supermarket where a 'buy two get one free' deal is offered on 12 pack sodas, the market forces at play likely involve a scenario where there is a high supply of the sodas and potentially a low demand. This surplus in supply may drive the market price down, even potentially below the cost of production, prompting the store to initiate a sales promotion to clear inventory and increase demand. These market dynamics are based on the fundamental principles of economics where demand and supply set market prices, rather than the cost of production alone.