Apprehensions about the future price of law of demand, Managerial Economics

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Apprehensions about the future price of law of demand

When consumers anticipate a constant rise in the price of a long-lasting commodity, they buy more of it despite the price rise. They do so with the intention of avoiding the blow of still higher prices in the future. Similarly when consumers expect a substantial fall in the price in future, they delay their purchases and hold on for price to decrease to anticipated level in place of purchasing the commodity as soon as its price decreases. These kinds of choices made by consumers are in contradiction of the law of demand.


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