Question

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to _________

Answer 1

Answer:

The correct answer is "decrease".

Explanation:

This would cause the current demand for computers to decrease because consumer expectations would be displaced in the long run by waiting for computer prices to decrease before going to buy them. This behavior is due to the advance announcement of the manufacturers.

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