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CIPS L4M4 Exam - Topic 3 Question 24 Discussion

Actual exam question for CIPS's L4M4 exam

Question #: 24
Topic #: 3

[All L4M4 Questions]

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

Athat there is little demand in the marketplace

Bdemand is exceeding supply

Cthere is a threat of substitution

Dthe marketplace is a monopoly

Show Suggested Answer

Suggested Answer: D

you would use a restricted approach when interest is likely to be high. The buyer needs a method of de-selecting unsuitable bidders and creating a shortlist of acceptable organisations.

For complex requirements you could use both an open or restrictive tender- the difference between the approaches is about how many bids you're likely to get rather than the complexity of it.

by Stevie at Sep 17, 2024, 04:22 AM

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Lakeesha

7 months ago

A monopoly? That seems a bit extreme!

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Jimmie

8 months ago

Not sure about that, could just be speculation.

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Rosalind

8 months ago

Surprised to see prices rising like this!

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Flo

8 months ago

I don't know, could be other factors at play.

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Albert

8 months ago

Definitely means demand is exceeding supply!

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Robt

9 months ago

I don't think it's a monopoly situation, but I can't recall why. It seems like rising prices usually relate to supply and demand dynamics.

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Mammie

9 months ago

I'm a bit confused; could it also mean there's a threat of substitution? I feel like I read something about that.

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Delisa

9 months ago

I remember a practice question that discussed how rising prices often indicate strong demand, so I lean towards option B.

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Sabina

9 months ago

I think if the price is continually rising, it might mean that demand is exceeding supply, but I'm not completely sure.

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Laurel

9 months ago

Okay, let me think this through. If the commodity price is continually rising, that must mean demand is exceeding supply. So I'm going to go with answer choice B.

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Ena

9 months ago

Hmm, I'm not totally sure about this one. I know it has to do with the relationship between supply and demand, but I'm not sure which answer choice best fits the situation described.

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Kyoko

9 months ago

This seems like a straightforward question about supply and demand. I'm pretty confident I can figure this out.

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Janna

9 months ago

Wait, I'm a little confused. Could the rising price also indicate a monopoly in the market? I'm not sure if that's the best answer, but I want to make sure I'm considering all the possibilities.

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Jovita

1 year ago

B) demand is exceeding supply? That's what they want us to think! I'm going with A) there is little demand in the marketplace. The man is trying to trick us, I tell you!

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Bernardo

1 year ago

I'm stumped on this one. Maybe I should have paid more attention in my Econ 101 class. Or maybe I should just ask my dog - he seems to know more about economics than I do.

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Hortencia

1 year ago

B) demand is exceeding supply

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Reita

1 year ago

C) there is a threat of substitution

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Harris

1 year ago

B) demand is exceeding supply

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Melissa

1 year ago

A) demand is exceeding supply

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Harrison

1 year ago

I'll have to go with C) there is a threat of substitution. I mean, why else would the prices be going up, other than people looking for alternatives?

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Carmelina

1 year ago

C) there is a threat of substitution

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Ayesha

1 year ago

B) demand is exceeding supply

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Pansy

1 year ago

A) that there is little demand in the marketplace

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Dorathy

1 year ago

But could it also mean there is a threat of substitution if prices keep rising?

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Ilda

1 year ago

I'm going with D) the marketplace is a monopoly. That's just common sense, right? If prices are constantly rising, it's gotta be a monopoly!

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Kristel

1 year ago

D) the marketplace is a monopoly

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Corrie

1 year ago

C) there is a threat of substitution

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Kimi

1 year ago

B) demand is exceeding supply

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Freeman

1 year ago

A) that there is little demand in the marketplace

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Thomasena

1 year ago

Clearly, the correct answer is B) demand is exceeding supply. Any first-year economics student could tell you that!

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Lyndia

1 year ago

I agree with Clarinda, when demand exceeds supply, prices go up.

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Clarinda

1 year ago

I think if the price of a commodity is rising, it means demand is exceeding supply.

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