A hailstorm kills all of the wheat in Minnesota. What will happen to the price and quantity of wheat sold in the U.S.?

Question

Quizplus · Accepted Answer

The hailstorm in Minnesota reduces the supply of wheat in the U.S. This means that there is less wheat available for purchase, causing the equilibrium price to rise. With a higher price, consumers will demand less wheat, causing the equilibrium quantity to fall. Therefore, both price and quantity will go in the opposite direction.

A Hailstorm Kills All of the Wheat in Minnesota