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Randyhale

What impact would a sudden increase in the price of wood have on producers and consumers? How might each group respond to the change in price?

  • one year ago
  • one year ago

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  1. order
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    If the price of wood were to increase all of a sudden, producers and consumers may both stop supplying and buying wood products, as it becomes expensive to both supply and sell the wood. However, if wood is highly valued, and suppliers are willing and able to supply wood, then supply will increase, while demand falls, as consumers are still unable and unwilling to buy at that price. However, if wood is a necesary item, that others cannot live without, then price will have little or no change in the demand, and supply may even drop as the price of the wood increases.

    • one year ago
  2. geoffb
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    Is the wood an input, or the commodity itself? If the former, it would shift the supply curve to the left (price of the commodity would go up, and quantity supplied would go down); if the latter, there would be no shift, but simply a movement along the demand curve (at the higher price, less people would be willing to buy wood).

    • one year ago
  3. Vanessaliberio
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    Hello... I think, that if the wood’s price would increase suddenly, it would influence in the price of all of the derivatives products . Then, to the producers group, the costs would increase and it would increase de sales price, affecting the consumers, who could answer positively, when the products are essential, and the other hand, negatively, when are superfluous products. Thinking that it be a superfluous product, the market would react negatively, decreasing the demand, what would do this business unprofitable, being necessary take other alternatives. This behaviour, depending of the why the price had been increased before,could decrease the cost of the wood.

    • one year ago
  4. geoffb
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    "I think, that if the wood’s price would increase suddenly, it would influence in the price of all of the derivatives products . Then, to the producers group, the costs would increase and it would increase de sales price" Yes, that's good. Although, you should specify *how* it would influence the price of all derivative products. Would the price go up or down? I'm not sure what you meant after that. What do you mean by, "affecting the consumers, who could answer positively, when the products are essential, and the other hand, negatively, when are superfluous products." Are you suggesting elasticity?

    • one year ago
  5. Vanessaliberio
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    Well... probaly, the price would go up...When i said that affect the consumers, i tryed to say that the consumers would pay more than they pay actually... Did you understand?.. and yes... it's about elasticity... I don't know if i am right, but it's my opinion... (And i'm not so good in english, i'm brazilian and i'm learning this language yet.. If you dont understand, please, ask again.. =))

    • one year ago
  6. geoffb
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    Sorry, I mistook your post for being by the original poster (who apparently has moved on). Sorry about that.

    • one year ago
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