Question

tо об о oo ID 00 010 1 PAX PX POLA POV PIA 01 000 00 01 000 Refer to the figure above. What best describes the change in the diamond market if both consumers and diamond producers expect the price of diamonds to rise in the future. © © © ©

Answer 1

Consumer will increase their current demand for diamonds if consumers expects a rise in future price of diamonds. Hence, the current demand curve will shift to the right.

Producers will decrease their current supply for diamonds if producers expects a rise in the future price of diamonds. Hence, the current supply curve will shift to the left.

In figure F, supply curve shifted to the left and demand curve shifted to the right.

Hence, figure F best describe the change in diamond market if both consumer and producers expects a rise in the future price of the diamonds.

Answer: Figure "F".