What is the effect of consumers' expecting that the future price of a product will increase?
A)It will cause an increase in the quantity demanded.
B)It will cause an increase in demand.
C)It will cause a decrease in demand.
D)It will cause a decrease in the quantity demanded.
E)It will cause a decrease in supply.

Question

Quizplus · Accepted Answer

When consumers expect that the future price of a product will increase, they are likely to buy more of the product now before the price goes up, leading to an increase in demand.

What Is the Effect of Consumers' Expecting That the Future