Final answer:
Buyers expecting future price increases of a good may purchase more currently, leading to an increase in present demand, illustrating how price expectations can temporarily override the law of demand.
Step-by-step explanation:
Buyers who expect the price of a good to be higher next month may increase their purchases now. This would increase the current demand for the good.
The basic model of demand and supply suggests an inverse relationship between price and quantity demanded, known as the law of demand. This law posits that an increase in price results in a decrease in the quantity demanded, and conversely, a decrease in price increases the quantity demanded. However, when buyers anticipate that prices will rise in the future, they may decide to buy more of the good now to avoid paying a higher price later, temporarily boosting current demand. This reaction is an example of how expectations of future prices can influence present economic behavior, though it does eventually reach a limit where high prices will reduce quantity demanded.