Liquid Gold? Sriracha Bottles Selling as High as $80

Prices for Sriracha are skyrocketing as the prolonged shortage of the chili peppers central to the recipe of the popular hot sauce is creating a Sriracha shortage.—usatoday.com

Answer the following questions to check your understanding of the story.

1) What is creating the Sriracha shortage?

a) a decrease in the supply of Sriracha that is greater than the decrease in demand

b) an increase in the demand for Sriracha with no change in supply

c) a decrease in the supply of Sriracha and an increase in demand

d) a decrease in the supply of Sriracha with no change in demand

2) How does the rise in price of Sriracha change the market for Sriracha?

As the price rises, _____________.

a) the quantity demanded decreases, the quantity supplied increases, and the shortage becomes a surplus

b) the quantity demanded decreases, the quantity supplied increases, and the shortage decreases

c) demand decreases, and with no change in supply the shortage decreases

d) supply increases, demand decreases, and the shortage decreases

Liquid Gold? Sriracha Bottles Selling as High as $80

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