A drought in California destroys many red grapes.As a result of the drought,the consumer surplus in the market for red grapes
A)increases,and the consumer surplus in the market for red wine increases.
B)increases,and the consumer surplus in the market for red wine decreases.
C)decreases,and the consumer surplus in the market for red wine increases.
D)decreases,and the consumer surplus in the market for red wine decreases.

Question

Quizplus · Accepted Answer

Due to the drought, the supply of red grapes decreases, leading to an increase in the price of red grapes. This decrease in supply also decreases the quantity of red grapes available in the market, which reduces the consumer surplus. As a result, the consumer surplus in the market for red wine also decreases because red grapes are used as an input to produce red wine. Therefore, the correct answer is D - decreases, and the consumer surplus in the market for red wine decreases.

A Drought in California Destroys Many Red Grapes