Hurricane Juan hit Halifax in 2003.The storm did over $300 million in damage.In the effort to repair the damage done by the storm, the prices of basic building materials and contractors increased dramatically.Many residents complained of profiteering and price gouging by contractors and home improvement stores.Which of the following offers the best explanation of the price increases people were seeing?
A)The hurricane reduced the number of suppliers of building materials.
B)The hurricane created an artificial shortage of building materials.
C)The hurricane caused an increase in the demand for building materials.
D)There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm.

Question

Quizplus · Accepted Answer

The hurricane caused widespread damage, leading to a significant increase in the demand for building materials for repairs and reconstruction, which in turn drove up prices.

Hurricane Juan Hit Halifax in 2003