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What describes a situation in which the price of a commodity would fall?
Wiki User
∙ 8y ago
A new technology allows producers to increase supply very quickly.
Wiki User
∙ 8y ago
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How does the price affect the supply of commodity?
Normally it's the other way 'round, the supply of a commodity determines the price. I assume if the price were out of line with the supply a lower price would decrease supply and a higher price would increase supply if increasing the supply were possible.
What would happen to the supply The price of the commodity decreases?
If supply of a commodity decreases, the supply will fall. Prices and supply of good have positive relationship.
What describes a situation that would tend to raise the price of goods?
Scarce natural resources make it more difficult for producers to keep up with demand.
Why would the government wish to control the price of a commodity below the market equilibrium price?
Artificially keeping the price of a commodity below market value by governments (usually by selling massive quantities) is to try and achieve the appearance of a greater value in something else.
How would suppliers react to a price increase for a product?
Suppliers supply more of the goods as and when prices of that commodity increases.
What describes a situation in which the price of a good would fall?
the community is crazy
What describes a situation which the price of a good would rise?
A new technology allows producers to increase supply very quickly
How does the price affect the supply of commodity?
Normally it's the other way 'round, the supply of a commodity determines the price. I assume if the price were out of line with the supply a lower price would decrease supply and a higher price would increase supply if increasing the supply were possible.
What would happen to the supply The price of the commodity decreases?
If supply of a commodity decreases, the supply will fall. Prices and supply of good have positive relationship.
What describes a situation that would tend to raise the price of goods?
Scarce natural resources make it more difficult for producers to keep up with demand.
Why would the government wish to control the price of a commodity below the market equilibrium price?
Artificially keeping the price of a commodity below market value by governments (usually by selling massive quantities) is to try and achieve the appearance of a greater value in something else.
How would suppliers react to a price increase for a product?
Suppliers supply more of the goods as and when prices of that commodity increases.
What type of professional would have quotes on commodity futures?
Any professional that owns a consumer type of business would want quotes on commodity futures. Commodity futures allow a contract holder to enter into agreements for a set price that will not fluctuate even if the pricing of said product goes up or down.
If price rises from 15 to 25 and quantity demanded falls from 20 to 10 units this commodity would have what demand?
increased demand
What would be the situation if the price was moved from p2 to p3?
D) there would be a shortage of widgets
Why does demand curve slope downward?
The demand curve slopes downwards due to the following reasons (1) Substitution effect: When the price of a commodity falls, it becomes relatively cheaper than other substitute commodities. This induces the consumer to substitute the commodity whose price has fallen for other commodities, which have now become relatively expensive. As a result of this substitution effect, the quantity demanded of the commodity, whose price has fallen, rises. (2) Income effect: When the price of a commodity falls, the consumer can buy more quantity of the commodity with his given income, as a result of a fall in the price of the commodity, consumer's real income or purchasing power increases. This increase induces the consumer to buy more of that commodity. This is called income effect. (3) Number of consumers: When price of a commodity is relatively high, only few consumers can afford to buy it, And when its price falls, more numbers of consumers would start buying it because some of those who previously could not afford to buy may now afford to buy it, Thus, when the price of a commodity falls, the number of its consumers increases and this also tends to raise the market demand for the commodity. (4) various uses of a commodity (5) law of diminishing marginal utility
Why does the demand curve downward sloping?
The demand curve is the opposite of the supply curve and it assumes that the cheaper the goods become the more consumers will purchase Demand curve is slope downward because of inverse relationship between price and quantity. The demand curve slopes downwards due to the following reasons (1) Substitution effect: When the price of a commodity falls, it becomes relatively cheaper than other substitute commodities. This induces the consumer to substitute the commodity whose price has fallen for other commodities, which have now become relatively expensive. As a result of this substitution effect, the quantity demanded of the commodity, whose price has fallen, rises. (2) Income effect: When the price of a commodity falls, the consumer can buy more quantity of the commodity with his given income, as a result of a fall in the price of the commodity, consumer's real income or purchasing power increases. This increase induces the consumer to buy more of that commodity. This is called income effect. (3) Number of consumers: When price of a commodity is relatively high, only few consumers can afford to buy it, And when its price falls, more numbers of consumers would start buying it because some of those who previously could not afford to buy may now afford to buy it, Thus, when the price of a commodity falls, the number of its consumers increases and this also tends to raise the market demand for the commodity. (4) various uses of a commodity (5) law of diminishing marginal utility It is assumed that if all thinngs remain constant once the price of a good decreases you buy more hence the reason for the negative slope dowards of the demand curve
