Question

Restaurants, bars, and convenience stores are often located near college campuses. These businesses frequently charge higher than normal prices. They are taking advantage of the fact that students

are able to pay higher prices than the rest of the population, so the businesses can charge higher prices than they otherwise would have been able to charge.

are unable to pay higher prices than the rest of the population, but they are able to succeed because they can sell to a large number of people.

place a high value on their scarce time and are willing to pay higher prices than they would at locations farther from campus.

place a low value on their scarce time and are willing to pay higher prices than they would at locations farther from campus.

place a high value on their scarce time and are unwilling to pay higher prices.

Answer 1

Option C.

• Restaurants, bars, and convenience stores are often located near college campuses. They charge higher than normal prices by taking advantage of the fact that students place a Higher value on their scarce time and are willing to pay higher prices than they would at locations farther from campus.
• People usually place higher value on those goods and services that are more scarce.
• Students face scarcity of time, and they do not have enough time to visit restaurants, bars and convenience stores that are located father away from their college's and schools.
• Hence they prefer buying items or food from the stores and restaurants open nearer to them.
• By taking advantage of this fact, the businesses charge higher than normal price's for those students.