It is expected that the price of a bushel of wheat will increase in one month. This belief will result in A) an increase in the current supply of wheat. B) a decrease in the current supply of wheat. C) a decrease in the future supply of wheat. D) no change in the current or future supply of wheat.

It is expected that the price of a bushel of wheat will increase in one month. This belief will result in A) an increase in the current supply of wheat. B) a decrease in the current supply of wheat. C) a decrease in the future supply of wheat. D) no change in the current or future supply of wheat.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 12QP

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Question

100%

It is expected that the price of a bushel of wheat will increase in one month. This
belief will result in
A) an increase in the current supply of wheat.
B) a decrease in the current supply of wheat.
C)
a decrease in the future supply of wheat.
D) no change in the current or future supply of wheat.
E) an increase in the current quantity supplied of wheat.

Expert Solution

Step 1

Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is an inverse relationship between quantity demanded and price, which means if the price of a good increases then the quantity demanded decreases and if the price of a good decreases then the quantity demanded increases.

Supply: - Supply is the relationship between the quantity supplied and the price of a good. There is a direct relationship between the quantity supplied and the price of normal goods which means if the price increases quantity supplied increases and if the price decreases the quantity supplied also decreases.

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