Use supply and demand theory to describe the increase and subsequent decrease of lumber prices based on the conditions described. What can you say will happen to equilibrium quantity in the lumber market? Will it increase, decrease or is it uncertain?

Topic: Discussion 3: Lumber Price x M Timber! Lumber Prices are Falling x + m/courses/17421/discussion_topics/156628 # Error This is a graded discussion: 100 points possible due Sep 19 Discussion 3: Lumber Prices are Falling From the EconEveryDay 7/21/2021 blog post "Timber! Lumber Prices are Falling" Recent data from the Bureau of Labor Statistics & show that the average price level for consumers rose 5.4% over the past year. While some are expressing concern over rising inflation leading the economy to "overheat." there is some evidence indicating that this is due to the reopening of the economy as producers adjust to rising demand for goods and services. Many of the goods with the largest price increases, like bacon or cars and trucks c , cannot have their production ramped up as quickly as demand is increasing. Other industries are facing supply chain challenges, like shortages of truck drivers 2 . These problems are most likely to be short term. so, as supply catches up with demand, we can expect to see prices return to normal. As evidence, after spiking to record highs in early summer, lumber prices & have now fallen below their price at the start of the year. The reason for the dramatic price increase c earlier in the year was a combination of reduced supply in 2019 and a surge in demand in 2020. In 2019, many lumber companies reduced capacity and closed mills to cut costs. Then in 2020, as more people began working from home they started fixing up their homes, and low interest rates led to an increase in new housing construction. As demand soared, lumber companies expanded their output capacity to meet the new demand. Now, as the economy reopens and people begin venturing outside of their homes, the demand for DIY projects has collapsed, leading to prices returning to their previous level. It is likely that other markets experiencing similar price increases will follow the same pattern. But depending on the industry, some may take longer than others to stabilize. Answer the following in a threaded reply