Can speculators who expect prices to rise actually cause those prices to rise in the short run?
A) Yes, if they buy up enough of the good, they will increase demand and thus raise the price of the product.
B) Yes, if they expect the price to rise, sellers will automatically raise prices for their products.
C) No, because speculators do not have enough power to cause an increase in demand.
D) No, because speculators' actions cannot influence a market equilibrium.

Question

Quizplus · Accepted Answer

Speculators who expect prices to rise can cause those prices to rise in the short run by buying up enough of the good, which will increase demand and thus raise the price of the product. However, this effect may not last in the long run if the fundamental factors of supply and demand do not support the higher price.

Can Speculators Who Expect Prices to Rise Actually Cause Those