Refer to the Provided Graph

question 51

Multiple Choice

Refer to the provided graph. Suppose consumers do not fully appreciate the benefits of the product whose market is shown in the graph. If an external agency is able to provide full information to consumers about the benefits of the product, then

• A)the supply curve will shift to the left.
• B)the demand curve will shift to the right.
• C)both the new equilibrium price and quantity will be lower.
• D)the new equilibrium price will be higher but the equilibrium quantity will be either higher or lower.

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Definitions:

Hedged Delivery

A technique used in trading and finance to mitigate risk by taking opposite positions in a market to protect against price movements.

Futures Contract

Agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Corn

A cereal plant that yields large grains, or kernels, set in rows on a cob; often grown as food for humans and fodder for animals.

Futures Price

The agreed-upon price for a financial instrument or commodity to be delivered and paid for at a future date.