Question

If producers expect the price of a good to rise in the future, what will happen to

the current equilibrium price and quantity of that good? *
O
The equilibrium price will decrease and equilibrium quantity will increase.
O
The equilibrium price will increase and equilibrium quantity will decrease.
O
The equilibrium price and quantity will both decrease.
O
The equilibrium price and quantity will both increase.

Answer 1

The equilibrium price will increase and equilibrium quantity will decrease.

Step-by-step explanation:

When producers see that a certain good will increase in price in order to maintain or increase the money they are generating they will decrease the quantity of the good. If the good is needed or in great demand they can and will raise the price of the good so that they make maximum profit out of it.