The price of a semiprocessed material-such as steel sheets instead of ingots,frozen pork bellies instead of hogs,cocoa butter instead of beans-tends to move in the opposite direction as the price of the basic raw material.

Question

Quizplus · Accepted Answer

The price of a semi-processed material typically moves in the same direction as the price of the basic raw material because the cost of the raw material is a significant component of the cost of the semi-processed material. When the price of the raw material increases, the cost to produce the semi-processed material also increases, leading to a rise in its price, and vice versa.

The Price of a Semiprocessed Material-Such as Steel Sheets Instead