In 2014, the price of peanuts was rising, which led peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently, in the current market for peanut butter there was ________ which resulted in a ________ in the price of peanut butter and ________ in the quantity of peanut butter.

Question

Quizplus · Accepted Answer

The expectation of a future price increase for peanut butter, due to rising peanut prices, would likely lead sellers to hold back supply in anticipation of higher future prices and buyers to purchase more now to avoid future price increases. This results in a decrease in supply and an increase in demand in the current market, causing the price of peanut butter to rise. The quantity change is uncertain because it depends on the relative magnitudes of the supply and demand shifts.

In 2014, the Price of Peanuts Was Rising, Which Led