What is the effect of producers' expecting that the future price of a product will decrease?
A)It will cause an increase in the quantity supplied.
B)It will cause an increase in demand.
C)It will cause a decrease in demand.
D)It will cause an increase in supply.
E)It will cause a decrease in supply.

Question

Quizplus · Accepted Answer

If producers expect that the future price of a product will decrease, they will want to sell as much of the product as possible before the price drops. This will cause an increase in supply as producers produce and sell more of the product in the present.

What Is the Effect of Producers' Expecting That the Future