Use the following to answer question(s): The Determinants of Demand and Supply

-(Exhibit: The Determinants of Demand and Supply) The exhibit shows how supply and demand might shift in response to specific events.Suppose a fall frost destroys one-third of the nation's orange crop.Which panel best describes how this will affect the market for oranges?

Question

Use the following to answer question(s): The Determinants of Demand and Supply
 
-(Exhibit: The Determinants of Demand and Supply) The exhibit shows how supply and demand might shift in response to specific events.Suppose a fall frost destroys one-third of the nation's orange crop.Which panel best describes how this will affect the market for oranges?

Quizplus · Accepted Answer

A fall frost destroying one-third of the nation's orange crop will cause a decrease in supply, which is represented by a leftward shift of the supply curve. This is shown in panel (b), where the supply curve shifts from S1 to S2. The result is an upward pressure on the price of oranges and a decrease in the quantity of oranges exchanged in the market. This is shown by the movement along the demand curve from point A to point B. Therefore, choice B best describes how this event will affect the market for oranges.

Use the Following to Answer Question(s): the Determinants of Demand