(Solved): The diagram below illustrates the international tin market. Assume that producing and consuming co ...

The diagram below illustrates the international tin market. Assume that producing and consuming countries establish an international commodity agreement under which the target price of tin is $$\$5$$ per pound. Figure 7.1. Defending the Target Price in Face of Changing Demand Conditions Consider Figure 7.1. Suppose the demand for tin increases from $${\mathrm{D}}_0$$ to $${\mathrm{D}}_1$$. Under a buffer stock system, the buffer-stock manager could maintain the target price by a. selling 30 pounds of tin. b. buying 15 pounds of tin. c. buying 30 pounds of tin. d. selling 15 pounds of tin.