-In the above figure, if D2 is the original demand curve and consumers come to expect that the price of the good will rise in the future, which price and quantity might result?

Question

Quizplus · Accepted Answer

When consumers expect that the price of a good will rise in the future, they are likely to purchase more of the good now to avoid higher prices later. This increases the current demand for the good, shifting the demand curve to the right (from D2 to a higher demand curve). Point c, with price P3 and quantity Q3, represents a situation where both the price and quantity of the good have increased due to this shift in demand.

-In the Above Figure, If D2 Is the Original Demand