Multiple Choice
What happens in the market for blenders if consumers decide that juicing their vegetables is better than blending their vegetables?
3. Supply and Demand
Shifting Demand
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What happens in the market for beef jerky if customers expect a price increase in the future?
A
Demand shifts to the left
B
Demand shifts to the right
C
Supply shifts to the left
D
Supply shifts to the right
Verified step by step guidance1
Understand the concept of expectations in economics: When consumers expect prices to rise in the future, they are likely to purchase more now to avoid paying higher prices later.
Identify the effect of consumer expectations on demand: If consumers expect the price of beef jerky to increase, the current demand for beef jerky will increase as consumers try to buy more before the price goes up.
Analyze the demand curve: An increase in demand is represented by a rightward shift of the demand curve. This means at every price level, the quantity demanded is higher than before.
Consider the options given: The correct answer should reflect the change in demand due to consumer expectations. Since demand increases, the demand curve shifts to the right.
Conclude with the correct market reaction: Based on the analysis, the correct answer is that the demand shifts to the right, as consumers are buying more in anticipation of future price increases.
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