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

User Catmantiger
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1 Answer

12 votes
12 votes

Answer:

Fall; Can not be determined

Step-by-step explanation:

Fall; Can not be determined

The fall in the prices of commodities in future will result in a decrease in demand at present and the seller will try to sell at the highest possible price so it will increase the supply. Resulting, the demand curve will shift leftwards and the supply curve will shift rightwards. But, the magnitude of shift in supply curve will decide the quantity. So, quantity can be increased or decreased. Thus prices will fall but quantity can not be determined.

User Yiran
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