Brazilian rosewood is renowned for its tonal qualities and gorgeous figuring on acoustic guitars. However, Brazilian rosewood is now banned from use in the construction of new guitars. What will likely happen to the price of used Brazilian rosewood guitars over time?
A. The price used for Brazilian rosewood guitars will decrease as fewer people decide to sell their rosewood guitars
B. The price for used Brazilian rosewood guitars will increase because there will be a smaller supply of those Guitars on the used market
C. The price for used Brazilian rosewood guitars will increase as more people try to cash in by selling their increasingly rare rosewood guitars
D. The price of used Brazilian rosewood guitars will increase at first and then decrease, since an increase in demand raises prices, causing people to buy less of the product

A ban on the use of rosewood will lead to a reduction of supply the acoustic guitars. The Brazilian rosewood makes the guitars famous, increasing their demand. A reduction in the supply of the guitars in the market increases their price.

The price of a commodity such as these guitars is determined by the supply and demand forces. The equilibrium point where the demand matches supply becomes the market price. Should there be a decrease in supply and demand remain constant, many buyers will compete for the few available guitars. A few sellers against many buyers will result in sellers increases prices and buyers raising their bids to buy the guitars.