Question

Explain how scarcity would affect both the demand and supply curves.

For example: the supply for carrots when a drought has devastated farmers.

Answer 1

Scarcity affects both the demand and supply curves. During a drought, the supply of carrots decreases, causing the supply curve to shift to the left. Conversely, after a period of good weather, the supply of carrots increases, shifting the supply curve to the right.

Step-by-step explanation:

Scarcity affects both the demand and supply curves. When there is a scarcity of a certain product, such as carrots during a drought, the supply of that product decreases. This means that at any given price, a lower quantity of carrots will be supplied. As a result, the supply curve shifts to the left. Conversely, when there is an abundance of a certain product, such as carrots after a period of good weather, the supply increases. This causes the supply curve to shift to the right.