A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the Odemand curve to the right supply curve to the left supply curve to the right demand curve to the left
The Correct Answer and Explanation is:
The correct answer is: supply curve to the left.
Explanation:
In economics, a drought negatively impacts the supply of agricultural products. This is because droughts reduce the ability of crops to grow, leading to a decrease in the overall quantity of agricultural goods available for sale at any given price. When there is less of a product available in the market, the supply curve shifts to the left.
Here’s why:
- The supply curve represents the relationship between the price of a good and the quantity of that good that producers are willing to supply. Typically, as prices rise, producers are willing to supply more of the good. A decrease in the supply of agricultural products—due to factors such as drought—means that for any given price, the quantity supplied will be lower than it would be under normal conditions.
- When drought conditions occur, farmers experience crop failures and a decrease in the overall harvest. This leads to a shift of the supply curve to the left, as there is now less agricultural output available for sale at every price point. The reduced supply can lead to higher prices if demand remains constant because the product becomes scarcer.
In contrast, good weather conditions would lead to a larger harvest, increasing the quantity supplied at any given price. This would shift the supply curve to the right, meaning that there is an increase in the amount of agricultural products available for sale.
Demand Curve:
The demand curve, on the other hand, shows the relationship between the price of a product and the quantity demanded by consumers. Factors like income, preferences, or the price of related goods shift the demand curve. A drought does not directly affect demand; however, it may indirectly affect demand if prices for agricultural goods rise due to reduced supply, which could lead consumers to purchase less.
In summary:
- Drought: shifts the supply curve to the left.
- Good weather: shifts the supply curve to the right.
