Suppose That a Major Drought Causes a 30 Percent Reduction

question 163

Multiple Choice

Suppose that a major drought causes a 30 percent reduction in the peanut harvest. If there is no change in demand, this event would cause a _____ at the original equilibrium price, and the equilibrium price will therefore _____ and the equilibrium quantity will _____.

• A) shortage; rise; fall
• B) shortage; rise; rise
• C) surplus; fall; fall
• D) surplus; fall; rise

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Definitions:

Estimate Cost

The process of forecasting the financial expenditure required to complete a project or produce a good.

Selection Phase

The stage in a project or procurement process where options are evaluated and choices are made regarding resources, suppliers, or methods.

Detailed Estimates

Comprehensive predictions of the expected costs, resources, or time needed to complete a project component or task.

Slower

Moving or operating at a reduced speed or pace compared to normal or expected.