Expectations of lower prices in the near future may cause some producers to do what? a. Increase the quantity supplied of the good nowb. Increase the supply of the good nowc. Decrease the supply of the good nowd. Decrease the quantity supplied of the good now

Question

Business

Bradley Moreno

18 August, 08:37

Expectations of lower prices in the near future may cause some producers to do what? a. Increase the quantity supplied of the good nowb. Increase the supply of the good nowc. Decrease the supply of the good nowd. Decrease the quantity supplied of the good now

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Answers (1)

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Hillary Blanchard · Answer 1

b. Increase the supply of the good now

Explanation:

Price expectations are one of the determinants of the supply curve. Changes in expectations will make the curve move right or left depending on whether future prices are expected to be lower or higher.

If prices are expected to be lower in the future, that will generate the supply curve to shift right, increasing the quantity supplied. This has to do with producers seeking to sell their goods at the highest price possible. If prices in the present are higher than what they would be in the future then they would want to sell more now than later.