If a firm expects that the price of its product will be higher in the future than it is today, the firm:
A)will go out of business.
B)has an incentive to expand and increase supply now.
C)has an incentive to decrease quantity supplied now and increase quantity supplied in the future.
D)has an incentive to decrease supply now and increase supply in the future.

Question

Quizplus · Accepted Answer

The Answer of If a firm expects that the price of its product will be higher in the future than it is today, the firm:
A)will go out of business.
B)has an incentive to expand and increase supply now.
C)has an incentive to decrease quantity supplied now and increase quantity supplied in the future.
D)has an incentive to decrease supply now and increase supply in the future.

If a Firm Expects That the Price of Its Product