If people expect the price of automobiles to increase drastically next year, it is likely that the demand curve for this year's automobiles will shift to the right.

Question

Quizplus · Accepted Answer

If people anticipate that the prices of automobiles will increase significantly in the future, they are more likely to purchase cars now to avoid higher prices later, thus increasing the current demand and causing the demand curve to shift to the right.

If People Expect the Price of Automobiles to Increase Drastically