Suppose that people expect that the price of orange juice will fall next month.We would predict that the equilibrium quantity of orange juice will ________ and the equilibrium price of orange juice will ________ this month.

Question

Quizplus · Accepted Answer

If people expect the price of orange juice to fall next month, demand for orange juice this month will decrease. As a result, the equilibrium quantity of orange juice will decrease, leading to a lower equilibrium price. Therefore, the best choice is D, where the equilibrium quantity and price both fall.

Suppose That People Expect That the Price of Orange Juice