Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

3. The Market Forces of Supply and Demand

Market Equilibrium

Microeconomics

3. The Market Forces of Supply and Demand

Market Equilibrium

Previous problemNext problem

Struggling with Microeconomics?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

What happens in the market for corn if producers expect a future price increase, and begin to put production into storage?

Demand shifts to the lef

Demand shifts to the right

Supply shifts to the left

Supply shifts to the right

Previous problemNext problem

Verified step by step guidance

Begin by understanding the concept of supply and demand in a market. Supply refers to the quantity of a good that producers are willing and able to sell at different prices, while demand refers to the quantity that consumers are willing and able to purchase.

Consider the scenario where producers expect a future price increase for corn. This expectation influences their current production decisions, as they anticipate higher profits in the future.

When producers expect higher future prices, they may choose to store some of their current production rather than sell it immediately. This action effectively reduces the current supply of corn available in the market.

A reduction in current supply, with demand remaining constant, leads to a leftward shift in the supply curve. This is because at each price level, the quantity of corn available for sale is now less than before.

Conclude that the correct market response to producers storing corn in anticipation of future price increases is a leftward shift in the supply curve, indicating a decrease in current supply.