Floods destroy many wheat farms. What happens to the supply curve?

Question

BlackTom AI · Accepted Answer

Destruction of farms reduces the economy’s ability to produce wheat, which lowers the market supply and therefore shifts the supply curve to the left.

1. Relevant knowledge points and concepts
- Supply curve: shows quantity supplied at each price, holding non-price determinants constant.
- Shift of supply vs. movement along supply: a movement along the supply curve is caused only by a change in the good’s own price. A shift of the supply curve is caused by changes in non-price determinants (e.g., number of sellers, production capacity, input availability, technology, weather).
- Weather disasters (floods) are a non-price determinant that affect production capacity and the number of functioning farms.

2. Step-by-step reasoning
- Floods destroy many wheat farms → fewer farms and less productive acreage remain.
- With less productive capacity, at any given market price sellers supply a smaller quantity of wheat.
- Therefore the entire supply relationship changes: for each price, the quantity supplied is lower than before.

3. Intermediate conceptual “steps” (no numeric calculations)
- Initial supply curve: S1.
- After destruction: supply at each price falls → new supply curve S2 lies to the left of S1.
- Market effect (for completeness): equilibrium quantity falls and equilibrium price tends to rise, but the key change is the leftward shift in supply.

4. Why the correct answer is correct
- Because floods change a non-price determinant (production capacity/number of sellers), the correct outcome is a leftward shift of the supply curve, not a price-driven movement along it.

5. Why other options are incorrect
- b (movement along the supply curve): incorrect because no change in wheat price is specified; the change is in supply capacity, not price.
- c (shift right): incorrect because a right shift means increased supply (more farms or better production), the opposite of destruction.
- d (no change): incorrect because destroying farms clearly reduces the amount producers can supply.

6. Conclusion
The correct answer is a. The supply curve shifts left.

Floods destroy many wheat farms. What happens to the supply curve?Single choice

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