Economics Case

Individual Assignment

1)

- Restaurants charge very high prices for wine and bottled water because most wines are imported.

- To produce wine, labour and machinery is needed for production.

- Restaurants buys wine and bottled water usually at a normal or cheaper price and sells it at a more expensive price to consumers.

- Food prices are priced reasonably because since food is a daily necessity, consumers needs food everyday and so, they purchase food products from anywhere and everywhere. If food was sold at a more expensive price, no one would really get it in the first place.

Restaurants charge very high prices for wine and bottled water because most wines are imported and not only that, wines takes a long time to produce and the labour for producing wine is tough and not easy. Not just one labourer is needed and making wine is hard work even with machinery. Other then using labour for producing wine, factories produce wine using big machines or some maybe small ones and the cost of getting a machine is not cheap and the other factors such as materials used by the company for producing wine and bottled waters also costs money. The restaurant imports and buys wines and bottled water usually at a normal or cheaper price and sells it to their consumers at a more expensive price. Since the upkeep of the restaurant is expensive, the increase in the selling price of the wine and bottled water should be sold at a more expensive price.