Flooding in the Midwest causes much of the farm crop to be destroyed. As a result, the market price of corn increases. We would expect:

Question

Quizplus · Accepted Answer

With the destruction of much of the farm crop, the supply of corn decreases. With a decrease in supply, the equilibrium price of corn will increase. As a result, farmers who still have corn to sell will be able to charge a higher price and increase their revenue, leading to an increase in farm income.

Flooding in the Midwest Causes Much of the Farm Crop