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What happens to the supply of a product when there is speculation about a future price increase?
  • a)
    Supply decreases
  • b)
    Supply remains constant
  • c)
    Supply increases
  • d)
    Supply is not affected
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
What happens to the supply of a product when there is speculation abou...
When there is speculation about a future price increase for a product, the supply of that product in the present market tends to decrease. Sellers anticipate higher profits in the future and may withhold some of their supply, expecting to sell it later at a higher price. This phenomenon leads to a decrease in the current supply of the product.
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What happens to the supply of a product when there is speculation about a future price increase?a)Supply decreasesb)Supply remains constantc)Supply increasesd)Supply is not affectedCorrect answer is option 'A'. Can you explain this answer?
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