Question

A year of unusually good rainfall has made it cheaper to irrigate farmlands. However, a popular new diet has persuaded some consumers to stop eating vegetable oil, a product often made from canola. What impact have these two changes had on the equilibrium price and quantity sold of canola?

Answer 1

Answer:

1)Price has decreased and the effect on quantity cannot be determined

Explanation:

As of good rainfall there is a rise in supply of canola that means the shifting o feh supply curve could be right  also the demanded for the vegetable oil would decline that means the demand is falling so the demand curve would shift to the left

Therefore, the equilibrium would fall but it is unable to figure out whether the quantity would rise or not without considering the elasticities of the demand and the supply curve

Hence, the correct option is 1