If a commodity index shows that the price of a commodity is continually rising, what does this indicate about the market?

If a commodity index shows that the price of a commodity is continually rising, what does this indicate about the market?
A . that there is little demand in the marketplace
B . demand is exceeding supply
C . there is a threat of substitution
D . the marketplace is a monopoly

View Answer

Answer: B

Explanation:

The correct answer is ‘demand is exceeding supply’- If everyone wants to buy something, the sup-pliers will likely increase the price.

If there was little demand or there were threats of substitutions, this would likely result in a price decrease.