An Increase in the Future Expected Price of a Storable

question 238

Multiple Choice

An increase in the future expected price of a storable good ________ supply.

• A) increases
• B) decreases
• C) does not change
• D) changes in an indeterminate direction

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of it that suppliers are willing to sell at various prices.

Perfectly Inelastic

A situation in which the quantity demanded or supplied does not change regardless of the price changes.

Excise Tax

A tax imposed on specific goods and services, such as gasoline, cigarettes, and alcohol.

Upsloping

Describes a line or curve on a graph that moves upward as it progresses from left to right, often used to depict positive relationships between variables.