If consumers expect the price of a product to rise in the future, the current equilibrium quantity in the market is likely to fall.

Question

Quizplus · Accepted Answer

This is because when consumers expect the price of a product to rise in the future, they are more likely to buy the product now, leading to an increase in demand. This increase in demand would result in a higher price and a decrease in the quantity demanded, leading to a new equilibrium point with a lower quantity demanded.

If Consumers Expect the Price of a Product to Rise