Potato Volume Up, Price Down for Holidays

EconEye Admin

3 years ago

A beautiful, early spring means that plenty of potatoes are available for holiday repasts this year with favorable prices for consumers. Unlike 2022, potato farmers did not experience any weather disruptions this year.—thepacker.com

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

According to the news clip, what change occurred in the potato market in 2023 compared to 2022?

In 2023, ____________.

a) the quantity of potatoes supplied increased

b) the demand for potatoes increased

c) the supply of potatoes increased

d) the supply of potatoes increased and the demand for potatoes increased

Wrong! - Why would the demand for potatoes change? What is the effect of weather disruptions on the market for potatoes?

Well Done! - The news clip states that potato farmers did not experience the weather disruptions in 2023 that occurred in 2022. So the supply of potatoes is greater in 2023 than in 2022.

If the only change in the potato market is the change described in question 1, how does the potato market move to its new equilibrium?

As the price falls, ____________.

a) the quantity demanded decreases until the shortage is eliminated

b) demand decreases until the surplus is eliminated

c) the quantity demanded increases until the surplus is eliminated

d) demand increases until the surplus is eliminated

Wrong! - When the supply of potatoes increases, does a shortage of potatoes emerge? When the market moves to its new equilibrium does demand change or does the quantity demanded change?

Correct! - When the supply of potatoes increases, a surplus of potatoes arises at the original price. As the price falls, the quantity of potatoes demanded increases until the surplus is eliminated.

Share this: