Now let's see how consumer expectations about future prices can affect the demand for a good today. So, if consumers are expecting prices to increase in the future, then you could expect them to want to buy the thing today at the cheaper price, right? So the demand for the good today is going to increase. Let me stick to red here. It's going to increase. Alright, so here we have a directly proportional relationship, right? They're both going up together. The future expected price is going up and the demand is going up, right? And notice again this one's a little tricky because we are talking about prices of our product, but it is not a change in the price, right? Because the price didn't change. The price didn't change. It's only the expectations about the price that change. So again, we've got another little technicality here, but it's not the price changing. We're just expecting a different price in the future. Cool.

So here are some examples of things that could change consumer expectations. The first one here being inclement weather. So if there's going to be some sort of shortage of a product because of a hurricane or because there's been a dry spell or whatever, you could expect them to kind of panic and want to buy more of it now before there's some sort of shortage in the future, right? So that would increase the demand now. How about future income? So a lot of people count their eggs before they hatch, right? They're like "Hey, I'm getting a raise next year so maybe I could spend a little more now." Yeah, not the best logic, but it still holds true in practice. And another one here, just expected price changes in general. How about the release of a new iPhone? Right, so let's say you were about to go buy the latest iPhone 12 or whatever it is and you just heard that Apple is going to be putting out iPhone 13. Well then, if you really wanted an iPhone 12, you'll probably wait till iPhone 13 comes out because you're expecting the price of iPhone 12 to go down, so you'll wait and not demand an iPhone 12 today and get it once the price decreases. Alright, so let's go ahead and try an example here.