ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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place these goods on the market immediately
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increase production of a good
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store these goods until the price goes up
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increase the price of the good now
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Detailed explanation-1: -Expecting Higher Prices: If sellers expect that the price of the good will be increasing in the future, then they are likely to sell less today. This causes a decrease in supply and a leftward shift of the supply curve.
Detailed explanation-2: -When a seller expects the price of its product to decrease in the future, the seller’s supply curve shifts left now. The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers’ decisions about how much to sell.
Detailed explanation-3: -The law of supply states that there is a direct relationship between price and quantity supplied. In other words, when the price increases the quantity supplied also increases. This is represented by an upward sloping line from left to right.
Detailed explanation-4: -One of the demand shifters is buyers’ expectations. If a buyer expects the price of a good to go down in the future, they hold off buying it today, so the demand for that good today decreases. On the other hand, if a buyer expects the price to go up in the future, the demand for the good today increases.
Detailed explanation-5: -A rise in the expected future price of a good increases the current demand for that good. A fall in the expected future price of a good decreases current demand for that good. a good for which the demand decreases if income increases and demand increases if income decreases.