An expectation of a lower price in the future will most likely:

• A. Increase current consumer surplus as buyers rush to purchase
• B. Increase current demand for the good
• C. Decrease current consumer surplus as buyers delay purchases
• D. Have no effect on current willingness to pay

Answer: (C)

Verified step by step guidance

1. Understand the concept of consumer surplus: it is the difference between what consumers are willing to pay for a good and what they actually pay.
2. Recognize that if consumers expect a lower price in the future, they are likely to delay their purchases to benefit from the lower price later.
3. Analyze how this expectation affects current demand: since buyers postpone buying, current demand decreases rather than increases.
4. Consider the impact on current consumer surplus: with fewer buyers purchasing now, the immediate consumer surplus decreases because consumers are not gaining surplus today but expect to gain it in the future.
5. Conclude that the expectation of a lower future price leads to a decrease in current consumer surplus as buyers delay their purchases.