When Hurricane Andrew passed through Louisiana in the summer of 1992, approximately a quarter of the sugar cane crop was destroyed. Ceteris paribus,

Question

Quizplus · Accepted Answer

When a significant portion of the sugar cane crop is destroyed, it directly reduces the amount of sugar that can be produced and supplied to the market. According to the law of supply and demand, when the supply of a good decreases (with demand remaining constant), the price of that good is likely to increase.

When Hurricane Andrew Passed Through Louisiana in the Summer of 1992