Sometimes price cuts can have an unintended result of consumers waiting for deeper discounts. What does this waiting suggest about supply and demand?
A. The demand curve slopes the wrong way because price cuts have lead to smaller sales.
B. If buyers are buying less when price falls, the supply curve must have moved left.
C. If buyers are buying less when price falls, the supply curve must have moved right.
D. Price cuts have changed buyers’ expectations, and the change in expectations has moved the demand curve left.
Answer:D
Sometimes price cuts can have an unintended result of consumers waiting for deeper discounts. What does this waiting suggest about supply and demand?
A. The demand curve slopes the wrong way because price cuts have lead to smaller sales. B. If buyers are buying less when price falls, the supply curve must have moved left. C. If buyers are buying less when price falls, the supply curve must have moved right. D. Price cuts have changed buyers’ expectations, and the change in expectations has moved the demand curve left.
Explanation: A shift to the left of the demand curve would be associated with a decrease in expected price. Expectations can play a significant role in markets, often resulting in unanticipated consequences.