(Figure: Shifts in Demand and Supply) Use Figure: Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose there is a freak snowstorm in Florida that destroys one-quarter of the orange crop. Which panel BEST illustrates how this event will affect the market for oranges?

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This event will shift the supply curve for oranges to the left (decrease in supply) as there is a decrease in the quantity supplied due to the damage to the orange crop. Panel B shows a leftward shift in the supply curve, along with a corresponding increase in the equilibrium price and a decrease in the equilibrium quantity. This is consistent with the effect of a decrease in supply on a market.