Refer to Scenario 3.2 below to answer the question(s) that follow.
SCENARIO 3.2: Lettuce and spinach are substitutes. Lettuce and tomatoes are complements. Lettuce is a normal good. During the winter, about 20% of the lettuce crop was destroyed by flooding.
-Refer to Scenario 3.2. If at the same time that part of the lettuce crop was destroyed, consumer income also decreased, then, ceteris paribus, in the market for lettuce this would have caused

Question

Quizplus · Accepted Answer

The destruction of the lettuce crop decreases supply, which tends to increase price and decrease quantity. However, a decrease in consumer income reduces demand for normal goods like lettuce, which tends to decrease both price and quantity. The net effect on price is uncertain, but the quantity will decrease.