The market for iron is perfectly competitive and all existing producers and potential entrants are identical....

The market for iron is perfectly competitive and all existing producers and potential entrants are identical. Consider the following information about the price of iron.

Between 2000 and 2005, the market price was stable at $2/pound.

In the first three months of 2006, the market price doubled reaching $4/pound, where it stayed for the remainder of 2006.

Throughout 2007 and 2008, the price declined, eventually reaching $2/pound by the end of 2008. Between 2008 and 2012, the price remained stable at $2/pound.

Assume that technology has not changed and that input prices have remained constant over the period. Using ONLY words, explain this pricing pattern over the period.

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Rahul Sunny answered 3 weeks ago

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