Question

If coconuts are considered a normal good and there is an expectation on the part of consumers that the prices of coconuts will rise significantly in the near future, then the movement that would take place in the model could be:_______.

Answer 1

either E ⇒ B, or A ⇒ C

Step-by-step explanation:

When consumers expect that the price of a normal good will increase significantly in the near future, the demand curve tends to shift to the right (at least temporarily). This means that the total quantity demanded of coconuts will increase at every price level.