In order for bubbles to occur,expectations of a price increase usually_______demand and ______supply
A)Increases;Increases
B)Increases;Decreases
C)Decreases;Increases
D)Decreases;Decreases

Question

In order for bubbles to occur,expectations of a price increase usually_______demand and ______supply​
A)​Increases;Increases
B)Increases;Decreases
C)Decreases;Increases
D)​Decreases;Decreases

Quizplus · Accepted Answer

In a bubble, investors buy assets based on the expectation of future price increases. This creates an increase in demand for the asset, driving up its price. However, as the price increases, it becomes less attractive to potential buyers and the supply of the asset tends to decrease as current holders hold onto it in anticipation of even higher prices. This results in a decrease in supply. Therefore, expectations of a price increase usually increase demand and decrease supply, leading to a bubble.

In Order for Bubbles to Occur,expectations of a Price Increase