The price of good X has a pattern such that P = $3 on Monday through Thursday of every week,and P = $2 on Fridays.If speculators begin participating in the market for good X,their actions will likely lead to a(n)______________ in the price of good X on Monday through Thursday and a(n)_______________ in the price of good X on Friday.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

If speculators begin participating in the market for good X with the intent to make a profit, they are likely to buy up large quantities of the good on Monday through Thursday when the price is higher. This will increase demand and push the price up even further. On Friday, when the price drops to $2, speculators may choose to sell off their excess supply, which will flood the market and reduce prices, leading to a decrease in the price of good X.

The Price of Good X Has a Pattern Such That