Upon Apple's announcement that the newest iPhone model will be released in the next six months, we could reasonably expect that demand for the current iPhone model will _____ due to a change in _____.
A) decrease; expectations of future prices
B) increase; expectations of future prices
C) increase; the supply of the current model
D) decrease; the price of a substitute good

Question

Quizplus · Accepted Answer

The announcement of a newer model in the near future creates the expectation of future prices, which leads to a decrease in demand for the current model. This is because consumers are likely to wait for the newer model to be released before making a purchase, which reduces demand for the current model. Therefore, choice A is the most appropriate option.

Upon Apple's Announcement That the Newest IPhone Model Will Be