Question

What is the effect of traders storing grain to wait for higher prices?
1) It's essential in preventing grain shortages
2) Traders are able to monopolize the market
3) Most shortages could have been prevented if traders had not speculated on grain prices

Answer 1

Answer:

2) Traders are able to monopolize the market.

Answer 2

3) Most shortages could have been prevented if traders had not speculated on grain prices

Explanation:

• Grain storage allows farmers to watch to see if markets are going to change. Producers expect prices to increase after harvest but there are also chances  to lower prices and due to grain storage it can result in loss.
• Even if price is the same, producers will suffer the lack of storage, known as the cost of opportunity, due to deferred interest received or charged. Holding costs often have to be taken into account when choosing to store grain.

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Commercial storage of grains - Brainly.in

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