Question

which circumstance is most likely to cause a farmer to store soybeans for a future sale instead of selling them right after harvest A.government imposes an excise tax effective next year.B. New technology decreases the chance of rot C. inflation is running at 25 percent​

Answer 1

Answer:

The circumstance that is most likely to cause a farmer to store soybeans for a future sale instead of selling them right after harvest is;

A. government imposes an excise tax effective next year

Explanation:

What majorly causes producers of a good to hold onto their goods to sell them at a later date is driven by an expectation of increased prices in the future. In our case, a government is expected to impose an excise tax that is effective next year. An excise tax is usually imposed on goods that are perceived as harmful to the public, thus the government tries to discourage it's usage by imposing the tax. By imposing the tax, more production of the good will be discouraged and the suppliers will have to increase the selling price of the goods to cover the tax costs.

In our case, the government is planning on imposing an excise tax on the production of soybeans effective next year. This typically implies that the price of soybeans will increase next year. It would therefor be prudent for a producer of soybeans to store his soybeans until next year when the price will have risen. In this way, the farmer can reap extra profits from the expected rise in price.