Question: How much does the retail price for roses increase around Valentine's Day?
Answer: About 100%
- What economic concept helps to explains this surge in pricing?
- What other examples of items/services can you think of that have prices that change based on demand?
- What challenges do you think rose growers encounter around Valentine's Day?
Behind the numbers (from Reuters):
At Reuters’ request, BloomNation examined the prices of hundreds of florists in New York, Chicago and Los Angeles - coming up with the average price that shops in America’s largest cities are paying for long-stemmed red roses at wholesale, and then selling at retail, both before and on Valentine’s Day.
Here’s what BloomNation found: Roses are cheaper in Los Angeles, where local growers supplement the import market and drive down prices, and are most costly in New York.
Prior to Valentine’s Day in Los Angeles, florists pay an average of 70 cents per stem. That rises to $1.85 per stem for Valentine’s Day. The retail price? About $3 to $6 per stem. In Chicago, the $1 per stem florists pay regularly shoots up to $2.25 for Valentine’s Day. Consumers can expect to pay $4 to $6 per flower, BloomNation found. In New York, the $1.50 wholesale price swells to $2.50. Retail prices rise from $5 to $8 per rose.
Interested in other examples of what happens to prices when supply/demand imbalances exist? Check out this post about Hamilton tickets.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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