Suppose that a drought occurred in corn-growing regions at the same time that a medical report was issued that corn is good for your health.

Which graph describes the effect on the market for corn?

Question

Suppose that a drought occurred in corn-growing regions at the same time that a medical report was issued that corn is good for your health.

Which graph describes the effect on the market for corn?

BlackTom AI · Accepted Answer

The prompt presents a situation where two events occur simultaneously: a drought in corn-growing regions and a medical report claiming corn is good for health. However, the question as given lacks the actual answer choices (graphs) to evaluate, so I can only reason about the expected economic effects and what kind of graph would illustrate them.

First, consider the drought. A drought reduces the supply of corn because producers cannot grow as much corn, or costs rise, making supply curve S1 shift left to S2. This leftward shift tends to raise the equilibrium price and lower the equilibrium quantity.

Second, consider the health report. If consumers believe corn is good for health, demand for corn increases. This causes the demand curve to shift right from D1 to D2, raising both the equilibrium price and the equilibrium quantity, ceteris paribus.

When both events occur together, the two shifts oppose the same axis for price: price is pushed up by both a supply contraction and an increase in demand. Therefore, the equilibrium price will rise. The effect on quantity is indeterminate from these qualitative shifts alone because the leftward shift in supply lowers quantity while the rightward shift in demand raises quantity; the net change in quantity depends on the relative magnitudes of the shifts.

In terms of graphing terms, the graph that correctly represents this scenario would show: a leftward shift of the supply curve (S1 to S2) and a rightward shift of the demand curve (D1 to D2), resulting in a higher price, with quantity moving up or down depending on which shift dominates.

Because the provided data lacks the actual answer options (no graphs are listed), I cannot point to which labeled graph corresponds to this outcome. If you supply the graph options (the actual graphs or their descriptions), I can map this analysis to the precise option and explain why that graph matches the described shifts and price–quantity outcomes.

ECON 2010-090 Summer 2025 Quiz 3 Due May 22nd

Suppose that a drought occurred in corn-growing regions at the same time that a medical report was issued that corn is good for your health. Which graph describes the effect on the market for corn?

View Explanation

Log in for full answers

Similar Questions

Price decreases for a product are most likely to occur when

Assume that a competitive industry producing a normal good is in long-run equilibrium. If average consumer income decreases, which of the following changes will occur?

Which of the following describes how a market will respond when the scarcity of a good increases?

Assume that consumers consider popcorn and pretzels to be substitutes. A significant decrease in the supply of popcorn will affect the pretzel market by

In the coffee market, which of the following changes will increase the price and decrease the quantity of coffee?

At an initial equilibrium, demand curve shifts to the left, supply curve remain unchanged. This creates and prices will _ restore the market equilibrium.

At an initial equilibrium, supply curve shifts to the left, demand curve remain unchanged. This creates and prices will _ restore the market equilibrium.

Due to the Covid-19 Pandemic, the demand for face masks and sanitizers have greatly increased which also increased the price for these products by 50%. Which of the following statements is true?

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler