What happens to the equilibrium price and equilibrium quantity of a good if both the producers and the consumers of that good expect its price to be higher in the future?

Question

Quizplus · Accepted Answer

When both producers and consumers expect higher future prices, demand increases now as consumers buy before prices rise, and supply decreases as producers hold back to sell later at higher prices. This leads to a higher equilibrium price, but the effect on equilibrium quantity is indeterminate as it depends on the relative shifts in supply and demand.

What Happens to the Equilibrium Price and Equilibrium Quantity of a Good