Question

How can expectations about the future change consumer behavior?
A.) immediate demand for a good will drop if the price is expected to stay the same
B.) Immediate demand for a good will rise if the good is expected to be plentiful
C.) Immediate demand for a good will rise if its price is expected to rise
D.) Immediate demand for a good will drop if there are no substitutes available

Answer 1

The answer is C. If the future price of a good is expected to rise, that means consumers would want to buy more NOW before the price increases. This causes the immediate demand to rise.

Answer 2

The correct answer to this question is:
Immediate demand for a good will rise if its price is expected to rise