Question

n​ 2007, an unseasonably dry spring led to a sharp decline in the quantity harvested of black​ morels, a wild mushroom found throughout the upper Midwest. Due to the scant​ harvest, the price of black morels rose from​ $9 per pound to nearly​ $45 per pound. In​ 2008, slightly aboveminusnormal rainfall levels led to a large black morel harvest. Assuming that the demand for black morels did not change from 2007 to​ 2008, we would expect the 2008 black morel supply to​ ________ and the equilibrium price of black morels to​

Answer 1

Answer:

Increase; fall

Explanation:

Due to the slightly above normal rainfall levels which led to a large black morel harvest, the supply of the commodity will increase.

However, since demand for the commodity is expected to remain the same as it was in 2007 despite the increase in supply, the equilibrium price is expected to fall as supply exceeds demand.