Discussion Board
You are watching a national news broadcast. It is reported that a typhoon is heading for the Washington coast and that it will likely destroy much of this year's apple crop. Your roommate says, "If there are going to be fewer apples available, I'll bet that apple prices will rise. We should buy enormous quantities of apples now and put them in storage. Later we will sell them and make a killing."
1. If this information about the storm is publicly available so that all buyers and sellers in the apple market expect the price of apples to rise in the future, what will happen immediately to the supply and demand for apples and the equilibrium price and quantity of apples?
2. Can you "beat the market" with public information? That is, can you use publicly available information to help you buy something cheap and quickly sell it at a higher price? Why or why not?
3. Suppose a friend of yours works for the U.S. Weather Bureau. She calls you and provides you with inside information about the approaching storm-information not available to the public. Can you "beat the market" with inside information? Why or why not?
Please go to the website of You Tube and copy and paste this link and watch the video
https://www.youtube.com/watch?v=05_oTFlrYek