ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Prices of related goods–frozen yogurt is a substitute for ice cream, so when its price goes up, more ice cream is demanded. Hot fudge is a complement for ice cream, so when its price goes up, less ice cream is demanded. Tastes–when tastes change, the quantity demanded changes.

Detailed explanation-2: -In fact, 22% of ice-cream sales occur during the winter, according to Partners for Growth, the impartial category advice service from manufacturer Unilever, which therefore urges retailers to stock ice-creams throughout the year.

Detailed explanation-3: -Ice cream sales are 2–4x higher in summer than winter, because demand is much greater. In a grocery setting, take out ice cream (pints and quarts) probably sells more in winter. Unless you’re making ice cream outside I’m not sure how much surplus and production causing a price drop has to do with it.

Detailed explanation-4: -The unusually hot weather causes the demand curve for ice cream to shift from D1 to D2, creating short-run excess demand (i.e., a temporary shortage) at the current price. Consumers will bid against each other for the ice cream, putting upward pressure on the price, and ice cream sellers will react by raising price.