Question

If consumers expect that the price of pretzels will decrease next week, what would happen today?

1. Demand today for pretzels would decrease.
2. Supply today of pretzels would decrease.
3. Demand today for pretzels would increase.
4. Demand today for pretzels would be unaffected.

Answer 1

1. Demand today for pretzels would decrease.

Step-by-step explanation:

If consumers expect that the price of pretzels would decrease next week, consumers would defer consumption till next week when they can pay a lower price. Therefore the demand for pretzels now would decrease.

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