Figure 7.4 Global Market for Tin

question 217

Multiple Choice

Figure 7.4 Global Market for Tin

-Consider the global market for tin represented by figure 7.4.Initially equilibrium is at point A with a market price of $3.50 per pound and 50,000 pounds.In ordr to keep tin price relatively stable an International Tin Agreement has set a price floor of $3.27 and a ceiling of $4.02.As the demand for tin increases to D1 how will the buffer-stock manager need to respond?

• A) buy 10,000 pounds of tin
• B) buy 20,000 pounds of tin
• C) sell 10,000 pounds of tin
• D) sell 20,000 pounds of tin

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