Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsSupply2 Marks
Question
How does rumors about price of future affect the current supply ?
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Answer
When there is a rumors about increase in price in future , even if the current price remains constant the supply contracts. Traders to gain more profit in future will increase the stock in present and therefore, supply contracts. On the contrary, if there is rumors regarding decrease of price in future, traders will reduce stock and increase sale. Thus, though the price is constant supply will be extended.
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