The relationship between future price expectations and current demand can be analyzed as follows:
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If the price is expected to rise, current demand will drop. - This statement is generally true because consumers may anticipate higher costs in the future and might decide to wait to make a purchase, leading to a decrease in current demand.
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Future price is not related to current demand. - This statement is not accurate. Future price expectations can influence current demand, so there is a relationship.
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If the price is expected to rise, current demand will rise. - This statement is typically false; if consumers expect prices to increase, they are likely to purchase less now, not more.
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If the price is expected to fall, current demand will rise. - This statement can be true, as consumers might delay their purchases to take advantage of lower prices in the future, but the overall effect on demand could vary based on the specific context and consumer behavior.
In summary, the most accurate statement in terms of how future price affects current demand is that if the price is expected to rise, current demand will typically drop. Conversely, if the price is expected to fall, current demand might also decrease, as consumers wait for better deals.
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