If a drought destroyed half of the French garlic crop at a time when the health benefits of garlic were being well publicized, economists would expect that in the market for garlic

Question

Quizplus · Accepted Answer

When there is a decrease in supply due to half of the French garlic crop being destroyed by drought, buyers will face a scarcity of garlic, leading to a higher price for garlic. However, the change in the quantity of garlic exchanged is uncertain without further information, as it depends on the relative magnitudes of the shifts in supply and demand. If the demand for garlic is relatively inelastic, then the quantity exchanged may not decrease significantly even if the price increases. On the other hand, if demand is relatively elastic, then the quantity exchanged may decrease significantly in response to the higher price.

If a Drought Destroyed Half of the French Garlic Crop