The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1

-Assume that a hurricane in Brazil destroys half of the coffee crop. Considering that Brazil is a major coffee producing country, consumers expect the price of coffee to increase in the near future. How does this reflect on the demand for coffee?
A)There is a movement upward along the demand curve for coffee.
B)The demand curve for coffee shifts inward.
C)The demand curve for coffee shifts outward.
D)There is a movement downward along the demand curve for coffee.
E)The demand for coffee declines.

Question

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1
 
-Assume that a hurricane in Brazil destroys half of the coffee crop. Considering that Brazil is a major coffee producing country, consumers expect the price of coffee to increase in the near future. How does this reflect on the demand for coffee?
A)There is a movement upward along the demand curve for coffee. 
B)The demand curve for coffee shifts inward. 
C)The demand curve for coffee shifts outward. 
D)There is a movement downward along the demand curve for coffee. 
E)The demand for coffee declines.

Quizplus · Accepted Answer

The expectation of future price increases can lead to an immediate increase in demand as consumers try to purchase coffee before prices go up. This is represented by an outward (or rightward) shift in the demand curve, not just a movement along the demand curve.

The Table Given Below Reports the Quantity Demanded of a Good