Answer to Question #171288 in Microeconomics for Amal zaghari

Question

Julio believes the price of lires will rise next month so he purchases a set of 4 for his pickup truck today

Answer 1

Anticipating price changes pervades the aspects of a consumer's decision-making and purchasing power. If a consumer expects prices of products to rise in the future, they purchase and stock them in large quantities. If they anticipate a decrease in such prices, they postpone their purchases until the prices fall. This explains why Julio purchases a set of 4 for his pickup truck today, believing they will hike in the future.