If Both Buyers and Sellers Expect the Price of a Commodity

question 131

Multiple Choice

If both buyers and sellers expect the price of a commodity to rise in the future,it is likely that supply will ________ and demand will ________.

• A) increase;decrease
• B) decrease;increase
• C) increase;increase
• D) decrease;decrease
• E) be constant;be constant

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Definitions:

Herfindahl Index

Measures the concentration of market power within an industry, calculated by summing the squares of the market share percentages held by the various firms within the market.

Herfindahl-Hirschman Index

The Herfindahl-Hirschman Index (HHI) is a measure of market concentration used to determine the level of competition within an industry, calculated by squaring the market share of each firm competing in the market and summing the resulting numbers.

Market Share

The share of the market held by a certain company or product.

Collusion

An agreement between firms to limit competition and manipulate markets in their favor, often in ways that are illegal or unethical.