Gold's Magic Price
We’ve had some old unwanted gold jewelry lying around for a long time. With gold at $1,237 per ounce, we figured it was time to sell it. We are a living movement up the supply curve of gold.
The local jeweler who bought the gold says we are hardly unique-but the pattern of supply has been interesting. He says there was little increase in quantity supplied until the price hit $1,000-then there was a flood. As the price has risen still further, some additional amount has been supplied, but not too much. Apparently, potential suppliers were waiting for the price to hit $,1000; thereafter, only those who hadn’t paid attention, like me, were left to enter the market. Exercise for students: Graph what this says about the shape of the supply curve!