Question: Consider the following forecast: Next month, we predict that the demand for oranges will continue to increase, which will tend to raise the price of

Consider the following forecast: “Next month, we predict that the demand for oranges will continue to increase, which will tend to raise the price of oranges. However, the higher price will increase supply, and a greater supply tends to lower prices. Accordingly, even though we predict that demand will increase next month, we cannot predict whether the price of oranges will rise or fall.” There is a serious mistake of logic in this forecast. Can you find it? Explain.

Step by Step Solution

★★★★★

3.40 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The mistake is in the assumption that a higher price will lead to a righ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

220-B-E-M-E (517).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Consider the following forecast results. Calculate MFE, MAD, and MAPE, using the data for the months January through June. Does the forecast model under- or over-forecast? MONTH ACTUAL DEMAND...

Will aggregate output rise or fall if an increase in autonomous consumer expenditure is matched by an equal increase in taxes?

The American demand and supply curves for oranges cross at a price of $8, but all Americans are free to buy or sell oranges on the world market at a price of $5. One day, the U.S. government...

Consider the following forecast. Next month, we predict that the demand for oranges will continue to increase , which will tend to raise the price of oranges, However, the higher prices Accor dingly,...

Consider the following forecast. Next month predict that the demand for oranges will continue to increase, which will tend to raise the price of oranges, However, the higher prices Accor dingly, even...

we consider the following forecast. Next month predict that the demand for oranges will continue to increase, , which will tend to raise the price of oranges, However, the higher prices Accor dingly,...

Consider the following forecast. Next month predicted we the demand for oranges will continue to increase, which will tend to raise the price of oranges, However, the higher prices Accor dingly, even...

1.An economy grows when it does all of the following except _______. A. acquires more machines to help it produce B. lowers prices C. improves the quality of labor by education D. develops better...

BLC Inc. is a medium-sized manufacturing company based in the UK. The company operates mainly in the London area and is based in Peterborough. At a recent board meeting, the company decided to expand...

Can you please help me solve these 10 Econ questions? I also attached the chapter just in case. Thanks so much!! :) MARKETS AND HOW THEY WORK 177 9.0 CHAPTER 9 LEARNING GOALS After reading this...

The trial balance of Smart Tots Child Care, Inc., does not balance. The following errors are detected: a. Cash is understated by $1,000. b. A $4,000 debit to Accounts receivable was posted as a...

Identify the major expense categories in the federal budget.

Another firm, called Lootem Power & Water, an established public utility company, has been paying dividends for the past 2 0 years. This year Lootem also announced that it will increase its dividends...

What do you do to stay in touch with the members of your team? Could you be doing more?

In the chapter, you learned that forces outside of the loanable funds market can influence the interest rate. Suppose the supply and demand curves in the loanable funds market are as depicted in...

a. What is the marginal propensity to consume implicit in these data? b. Plot a 45° line, and then use the data to draw an aggregate expenditure line. c. What is the equilibrium level of real...

a. Complete the following table when autonomous consumption is $30 billion, the marginal propensity to consume is 0.85, and net taxes are $0. b. Use your answers in part (a) and assume planned...

U Malagerial Accounting, 8e Help System Announcements Return to Blackboard Matching Question 199 Match the following statements to the appropriate terms. Used to apply manufacturing overhead to jobs....

Ratio of Liabilities to Stockholders' Equity and Times Interest Earned Hasbro, Inc. and Mattel, Inc. are the two largest toy companies in North America. Condensed liabilities and stockholders' equity...

Harold's Helpers provides locksmith services. One type of service call is to evaluate private residences for security concerns and make recommendations for a safety plan. Use the data below to...