Your firm produces ready- made guacamole and avocados are the primary ingredient. During a news report, weather forecasters just announced that there will be a freeze in the region in which your firm buys avocados. This freeze will likely damage many of the avocados that are almost ready for harvest.
-Refer to the figure above. Which of the following is likely to occur as a result of the freeze?

Question

Quizplus · Accepted Answer

A freeze that damages many of the avocados that are almost ready for harvest will likely reduce the supply of avocados, causing the supply curve to shift to the left. This, in turn, will likely lead to an increase in the price of avocados, as the market adjusts to the reduced supply. The demand curve is unlikely to shift in response to the freeze unless there is a concurrent change in consumer preferences or incomes.

Your Firm Produces Ready- Made Guacamole and Avocados Are the Primary