Question 10 The Market: Potato chips. The Event: A fungal disease affecting pota

Question

Question 10

The Market: Potato chips.
The Event: A fungal disease affecting potatoes breaks out in Idaho, ravaging the season’s potato crop. Simultaneously, new research shows potato chips to be one of the healthiest foods you can eat.

Given the above information, we can most reasonably expect that in the market for potato chips the supply curve will:

Question 11

The Market: Potato chips.
The Event: A fungal disease affecting potatoes breaks out in Idaho, ravaging the season’s potato crop. Simultaneously, new research shows potato chips to be one of the healthiest foods you can eat.

If the supply curve for potato chips changes, what is the best reason for the change?

Explanation / Answer

Q10. Answe r is c. Shift left. Explanation: As the inputs has been affected resulted in increased cost of inputs and decreased supply of inputs, the supply of Chips will diminish, resulting in downward shift in supply to the left. Q11. Answer is d. Change in input prices for potato chips. Explanation: As the corp of potato has been affected resulting in shortage of potato in the market for which the price of potato will increases. The potato serves as input for the chips.

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