If consumers expect an increase in the price of coffee next month,what will happen to the equilibrium price and quantity of coffee this month?
A)Price will increase,quantity will decrease
B)Price will increase,quantity will increase
C)Price will decrease,quantity will decrease
D)Price will decrease,quantity will increase
E)The new equilibrium price and quantity can not be determined

Question

Quizplus · Accepted Answer

If consumers expect an increase in the price of coffee next month, they are likely to buy more coffee this month to avoid higher prices later. This increase in demand will push the current equilibrium price and quantity of coffee up.

If Consumers Expect an Increase in the Price of Coffee