Consider the global market for tin represented by Figure 7.4. Initially equilibrium is at point A with a market price of $3.50 per pound and 50,000 pounds. In order to keep tin price relatively stable an International Tin Agreement has set a price floor of $3.27 and a ceiling of $4.02. As the demand for tin increases to D1 how will the buffer-stock manager need to respond?

Select one:

a.buy 10,000 pounds of tin

b.buy 20,000 pounds of tin

c.sell 10,000 pounds of tin

d.sell 20,000 pounds of tin