Question

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to double by the end of the year. As a result,
a. your demand for peanut butter will increase, but not until the end of the year.
b. your demand for peanut butter increases today.
c. your demand for peanut butter decreases as you look for a substitute good.
d. your demand for peanut butter shifts left today.

Answer 1

Answer:

b. your demand for peanut butter increases today.

Explanation:

If the price of a commodity would increase at a later date, consumers would increase demand for the good today. Consumers would be willing to buy as much as they can at the lower price. This would shift the demand curve to the right.