If the price of onions will rise in future, what will happen to the current demand of the consumer?
Answer & explanation
Correct answer: option 1
The most important and the basic assumption of economics is "Rationality". Any rational consumer will try to get maximum benefit out of any transaction. So, if a person knows that the prices of onion are going to rise, he would act rationally and hoard certain amount for future use, when the prices are raised. Thus, we can say future rise in the price of onion will cause an increase in the demand for the same at the present times.