PRC-3 · Chapter 10 · Question 29 of 70
Consumers hear a verified news leak that the government will double the tax on mobile phones starting next week. What happens in the mobile phone market today?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Current demand shifts to the right
Explanation
Expectations of higher future prices prompt consumers to buy immediately to beat the price hike, causing an outward shift in current demand.
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