Question

When firms in a market expect the price of their products to rise, the supply curve of their goods ________, causing the equilibrium price to ________.

Answer 1

SHIFT TO THE LEFT, & RISE

Step-by-step explanation:

When firms knows that the future prices of their goods are going to rise then as a result they decreases the current supply of goods and shifts the supply curve leftwards. This shift in the supply curve increases the equilibrium price level and decreases the equilibrium quantity in an economy.

Firms reduces the supply of the product because they wants to earn more profit in the future with higher profits, so they hold some quantity of the goods for the future benefit.