If Both Buyers and Sellers Expect the Price of a Commodity

question 13

Multiple Choice

If both buyers and sellers expect the price of a commodity to rise in the future, it is likely that the market clearing price ________ and the equilibrium quantity ________.

• A) will fall, cannot be predicted
• B) will rise, cannot be predicted
• C) cannot be predicted, will fall
• D) cannot be predicted, will rise

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Definitions:

Analytic Production System

A system that uses analytical methods to optimize production and operational efficiencies.

Raw Materials

Basic materials from which products are made, including metals, plastics, textiles, and natural resources.

Short-term Contracts

Employment agreements with a limited duration, typically less than one year.

Product Layout

An arrangement where workstations or machinery are sequenced according to the steps in which a product is made, facilitating a continuous flow of production.