Suppose that consumers expect that the price of a product will increase in the future. The result is that:

Question

Quizplus · Accepted Answer

If consumers expect the price of a product to increase in the future, they may decide to buy the product now, increasing the current demand for the product. This could lead to a shortage in the market, causing prices to rise further. As a result, suppliers may increase their production to meet the current demand, but this may not be enough to satisfy all consumers.

Suppose That Consumers Expect That the Price of a Product