Most economists believe that reducing the price of any product generally stimulates demand for it. However, most wine merchants have found that reducing the price of domestic wines to make them more competitive with imported wines with which they were previously comparably priced is frequently followed by an increase in sales of those imported wines.
Question: Which one of the following, if true, most helps to reconcile the belief of most economists with the consequences observed by most wine merchants?
Options:
A. Economists' studies of the prices of grocery items and their rates of sales rarely cover alcoholic beverages.
B. Few merchants of any kind have detailed knowledge of economic theories about the relationship between item prices and sales rates.
C. Consumers are generally willing to forgo purchasing other items they desire in order to purchase a superior wine.
D. Imported wines in all price ranges are comparable in quality to domestic wines that cost less.
E. An increase in the demand for a consumer product is compatible with an increase in demand for a competing product.
Answer: E