Figure 7.4 Global Market for Tin

-Consider the global market for tin represented by figure 7.4.Initially equilibrium is at point A with a market price of $3.50 per pound and 50,000 pounds.In ordr to keep tin price relatively stable an International Tin Agreement has set a price floor of $3.27 and a ceiling of $4.02.As the demand for tin increases to D1 how will the buffer-stock manager need to respond?
A) buy 10,000 pounds of tin
B) buy 20,000 pounds of tin
C) sell 10,000 pounds of tin
D) sell 20,000 pounds of tin

Question

Figure 7.4 Global Market for Tin
 
-Consider the global market for tin represented by figure 7.4.Initially equilibrium is at point A with a market price of $3.50 per pound and 50,000 pounds.In ordr to keep tin price relatively stable an International Tin Agreement has set a price floor of $3.27 and a ceiling of $4.02.As the demand for tin increases to D1 how will the buffer-stock manager need to respond?
A) buy 10,000 pounds of tin 
B) buy 20,000 pounds of tin 
C) sell 10,000 pounds of tin 
D) sell 20,000 pounds of tin

Quizplus · Accepted Answer

The Answer of Figure 7.4 Global Market for Tin
 
-Consider the global market for tin represented by figure 7.4.Initially equilibrium is at point A with a market price of $3.50 per pound and 50,000 pounds.In ordr to keep tin price relatively stable an International Tin Agreement has set a price floor of $3.27 and a ceiling of $4.02.As the demand for tin increases to D1 how will the buffer-stock manager need to respond?
A) buy 10,000 pounds of tin 
B) buy 20,000 pounds of tin 
C) sell 10,000 pounds of tin 
D) sell 20,000 pounds of tin