2) Despite the theory of how prices are determined in a competitive market, queues exist in a variety of settings. One reason for this could be demand uncertainty - it is difficult for sellers to predict how much demand there is for their products.

a. Can you give an example of a good where demand is highly uncertain (or highly volatile)? [2 marks]

b. Why do you think demand uncertainty can explain why queues exist? [2 marks]

c. One argument for why queues exist for turf is that they are highly perishable; i.e. the product goes to waste if it is not sold on the day. Why do you think a perishable good is more likely to result in queues? [2 marks]