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How would a natural disaster damaging crops trigger income effect and lower demand

User Bleiz
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1 Answer

5 votes

Answer:

A natural disaster would cause a negative income effect and lower demand

Step-by-step explanation:

Damaged crops are essentially worthless at an agricultural viewpoint. Therefore, demand for damaged crops would be at zero. If there so happened to be crops that were salvaged, they could be sold, although with low numbers being sold your income will subsequently go down. This is a negative income effect.

User Venkatnz
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