Economic theory predicted that the price of a depletable resource would rise by 10 percent.In reality, the price fell by 5 percent.Which of the following events could explain this discrepancy?
A)Known reserves of the resource were depleted.
B)The interest rate rose by 15 percent.
C)Antitrust enforcement broke up a cartel among major suppliers of the resource.
D)The government imposed an effective price floor.

Question

Quizplus · Accepted Answer

Antitrust enforcement broke up a cartel among major suppliers of the resource, leading to increased competition and decreased prices. This factor was not accounted for in the economic theory's prediction.

Economic Theory Predicted That the Price of a Depletable Resource