Refer to the accompanying figure. Suppose the solid line shows the current demand for coffee. In response to news that next year's coffee harvest will be extremely good due to favorable weather conditions, you should expect:
A)the quantity of coffee demanded to decrease, but no shift in the demand curve.
B)the demand curve to shift to D(A)in anticipation of lower future prices.
C)the demand curve to shift to D(
B)in anticipation of lower future prices.
D)neither a change in quantity demanded nor a shift in demand because it will be a long time before next year's coffee crop is harvested.

Question

Refer to the accompanying figure. Suppose the solid line shows the current demand for coffee. In response to news that next year's coffee harvest will be extremely good due to favorable weather conditions, you should expect: 
A)the quantity of coffee demanded to decrease, but no shift in the demand curve.
B)the demand curve to shift to D(A)in anticipation of lower future prices. 
C)the demand curve to shift to D(
B)in anticipation of lower future prices. 
D)neither a change in quantity demanded nor a shift in demand because it will be a long time before next year's coffee crop is harvested.

Quizplus · Accepted Answer

If people expect the future price of a good to decrease, then current demand for the good will decrease.

Refer to the Accompanying Figure