Explain the difference in prices for each of the following pairs of goods in terms of the laws of supply and demand: (a) natural diamonds and zircons (human-made diamonds), (b) a loaf of bread baked today compared with day-old bread, (c) roses in January and roses in June

(a) Natural diamonds have inelastic supply as such diamonds cannot be produced by humans according to their demand. Zircons have an elastic supply as their production can be changed with a change in their demand. Goods with inelastic supply are always more costly than the goods which have elastic supply. Therefore, the price of natural diamonds is more than the price of zircons.

(b) The loaf of the bread, which is freshly baked, is more preferred by consumers due to its freshness and therefore has a relatively high demand. On the other hand, the demand for a day-old baked bread is relatively less as it is less preferred by the consumers. Goods that have a high demand have a greater price. Therefore, the price of freshly baked bread is more than the price of day-old baked bread.

(c) The supply of roses in January is more than the supply of roses in June due to the climatic conditions in January. The price of a good which has less supply is more than the price of a good which has less supply. Therefore, the price of roses in June is more than their price in January.