In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see
A) a surplus of oranges.
B) the quantity demanded equal to the quantity supplied.
C) a shortage of oranges.
D) an increase in the demand for oranges.

Question

Quizplus · Accepted Answer

Since the hurricane damaged a large portion of the orange crop, many orange growers were not able to supply fruit to the market. This means that there will be a decrease in the supply of oranges, which will shift the supply curve to the left. At the pre-hurricane equilibrium price, the quantity demanded by consumers will be higher than the quantity supplied by producers. Hence, there will be a shortage of oranges.

In 2004, Hurricanes Damaged a Large Portion of Florida's Orange