ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Consumer expectations refer to the predictions that people make about the value that a good or service may have in the future. When people expect the value of something to rise, demand also rises. Many businesses predict consumer expectations to determine the projected equilibrium price.

Detailed explanation-2: -One of the demand shifters is buyers’ expectations. If a buyer expects the price of a good to go down in the future, they hold off buying it today, so the demand for that good today decreases. On the other hand, if a buyer expects the price to go up in the future, the demand for the good today increases.

Detailed explanation-3: -If consumers expect a product’s price to fall, they will wait to buy the product when it is cheaper. In other words, demand falls. But if they expect the price to increase, they demand more of the product now, while it’s still cheap.

Detailed explanation-4: -Expectations:-If consumers expect prices to increase in the future they increase their demand today.