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Figure: Shifts in Demand and Supply II
-(Figure: Shifts in Demand and Supply II)Use Figure: Shifts in Demand and Supply II.The graph shows how supply and demand might shift in response to specific events.Suppose a drought destroys one-third of the nation's wheat crop.Which panel BEST describes how this will affect the market for wheat?

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Use the following to answer questions:
Figure: Shifts in Demand and Supply II 
-(Figure: Shifts in Demand and Supply II)Use Figure: Shifts in Demand and Supply II.The graph shows how supply and demand might shift in response to specific events.Suppose a drought destroys one-third of the nation's wheat crop.Which panel BEST describes how this will affect the market for wheat?

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A drought will reduce the supply of wheat, shifting the supply curve to the left. This will lead to a higher equilibrium price and a lower equilibrium quantity, as shown in Panel (c).

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