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Figure: Shifts in Demand and Supply III
-(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose a wet and sunny year increases the nation's corn crop by 20 percent. Which panel BEST describes how this will affect the market for corn?
A)panel A
B)panel B
C)panel C
D)panel D

Question

Use the following to answer questions :
Figure: Shifts in Demand and Supply III 
-(Figure: Shifts in Demand and Supply III) Look at the figure Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose a wet and sunny year increases the nation's corn crop by 20 percent. Which panel BEST describes how this will affect the market for corn?
A)panel A 
B)panel B 
C)panel C 
D)panel D

Quizplus · Accepted Answer

A wet and sunny year increasing the nation's corn crop by 20 percent would increase the supply of corn, so the supply curve shifts to the right. This is shown in panel B, where supply shifts from S1 to S2, causing the equilibrium quantity to increase from Q1 to Q2 and the equilibrium price to decrease from P1 to P2.

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