If both producers and consumers believe that a product's price will rise in the future,then at the present,demand ________ and supply ________.
A) increases; increases
B) decreases; decreases
C) increases; decreases
D) decreases; increases
E) does not change; does not change

Question

Quizplus · Accepted Answer

If both producers and consumers believe that a product's price will rise in the future, then consumers will be more likely to buy the product now before the price goes up, increasing demand. On the other hand, producers may choose to hold onto their supply in expectation of a higher price in the future, decreasing supply. This leads to an increase in demand and a decrease in supply, making option C the correct answer.

If Both Producers and Consumers Believe That a Product's Price