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Figure: Demand for Coconuts
-(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts are a normal good and consumers believe that the price of coconuts will rise significantly in the near future, it will be represented in the figure as a movement from:
A)C to A.
B)A to B.
C)B to E.
D)E to B.

Question

Use the following to answer questions :
Figure: Demand for Coconuts 
-(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts are a normal good and consumers believe that the price of coconuts will rise significantly in the near future, it will be represented in the figure as a movement from:
A)C to A. 
B)A to B. 
C)B to E. 
D)E to B.

Quizplus · Accepted Answer

If consumers believe that the price of coconuts will rise significantly in the near future, it will lead to an increase in demand for coconuts at the current price. This will cause a shift of the demand curve to the right, from D1 to D2, resulting in a new equilibrium point at E2. Therefore, the movement will be from point E to point B.

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