Leading economic indicators suggest that incomes will be going up next year.In response to these reports,companies are forecasting increased prices for future sales of their goods.As a result of these increases,the supply curve will

Question

Quizplus · Accepted Answer

When companies forecast increased prices for future sales due to expected higher incomes, they anticipate higher demand. This anticipation might lead them to reduce the quantity supplied at current prices or increase prices, effectively shifting the supply curve to the left. A leftward shift in the supply curve, with demand holding or increasing, typically causes the equilibrium price to increase because the quantity of goods available at previous prices has decreased, leading to higher prices for the available supply.

Leading Economic Indicators Suggest That Incomes Will Be Going Up