Question

potato crops in idaho have been damaged by plant disease, causing a scarcity of potatoes in the market. what is the most likely effect of the scarcity? a. the price of potatoes will decrease. b. the demand for potatoes will increase. c. the demand for potatoes will decrease. d. the price of potatoes will increase.

Explanation:

When potato crops are damaged, the supply of potatoes decreases (since less is available). According to the law of supply and demand, if supply decreases (while demand, assuming no immediate change in consumer desire, stays the same or doesn't decrease proportionally), the price of the good (potatoes) will increase. Let's analyze each option:

• Option A: A decrease in price would happen if supply increased or demand decreased, which is not the case here.
• Option B: Demand refers to the quantity consumers want to buy. The crop damage affects supply, not directly demand (unless there's a change in consumer preference, which isn't indicated here). So demand won't necessarily increase.
• Option C: There's no reason for demand to decrease due to crop damage (unless consumers suddenly dislike potatoes, which isn't stated). The damage affects supply, not demand.
• Option D: With a scarcity (decrease in supply) and assuming demand remains relatively stable, the price of potatoes will increase as consumers compete for the limited supply.

Answer:

D. The price of potatoes will increase.