Question

A severe freeze has once again damaged the Florida orange crop. Explain the impact of the weather condition on the market for orange juice (i.e., which curve will be affected, what direction will the curve shift to, and what happens to equilibrium price and quantity).

Answer 1

Answer:

Because the freeze has damaged the orange crop, the supply curve wil shift to the left, since suppliers now have less oranges available for sale.

This will cause the equilibrium quantity to fall, because there is less produce available, and the equilibrium price to rise, because all else being equal demand remains unaffected, and now, more consumers will scramble for a lesser amount of the good.