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Is a commodity contract necessary for the private provision of money? Under what assumptions might this...

Is a commodity contract necessary for the private provision of money? Under what assumptions might this be false?

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Answer #1

Commodity futures contract is a type of contract between the buyer and the seller to buy or sell a particular amount of the commodity at the pre-defined price. It benefits the buyers as the risk associated wit price fluctuations are reduced. The sellers get the promise of guaranteed price by this contract.

So, we can infer that this agreement facilitates the private provision for money for both buyer and seller.

If the seller is not able to make profit then in such case, the assumption of commodity future contracts that these contracts are prepared for social advantage of buyer and seller, goes to stake and becomes false.

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