Question

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of
Use letters in alphabetical order to select options

A

both the supply and demand curves.

B

the demand curve, as consumers try to economize because of the shortage.

C

the supply curve.

D

the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

Answer 1

Answer:

C. Supply Curve

Explanation:

Supply : Quantities sellers are able & willing to sell at a price , period . Determinants :  Price (price supply direct relationship - upward sloping curve) , Inputs Price , Other goods price , Technology , Govt Policy , Seasonal factors .

Change in supply due to Price is 'Change in Quantity supplied' , leads  to movement along the curve . Change in Supply due to other factors is 'Change in Supply' & shifts the curve

Damage of orange crop will decrease its supply & hence derived supply of its by product orange juice .

Since the decrease in supply is due to other (seasonal) factor , it will shift the supply curve - decrease it & leftward shift . This supply deficiency leads to excess demand raising the equilibrium prices finally .