Question

A volcano erupts in Hawaii that destroys or severely damages many of the pineapple orchards located there. What will be the effect on price and quantity of pineapples sold?

A) price will fall and quantity will fall
B) price will fall and quantity will rise
C) price will rise and quantity will fall
D) price will rise and quantity will also rise

Answer 1

C) price will rise and quantity will fall

Step-by-step explanation:

If pineapple orchards are destroyed by a volcano, the output or pineapple harvest will reduce drastically. There will be a reduced supply in the market and, consequently, a shortage.

Every time there is a shortage of a product, prices tend to rise. Many buyers scramble for the few goods, which results in suppliers hiking the price to a new equilibrium point.

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