After hearing that you are studying economics, your mother makes this statement: "When I visited Woollies, I realised that price of red potatoes and white potatoes are similar, even at other supermarkets (i.e. Coles and Aldi) the price is not that different. However, when I went to K-Mart I found a handbag roughly cost $50, hereas at Gucci one handbag (arguably the same dimension as the K-Mart handbag) can cost as high as $5,000."

(a) What feature(s) of these two markets (potatoes and handbags) affect the sellers' ability to decide price differently? Explain.

(b) Provide another example of products with similar characteristics in two markets. Explain.