Answer to Question #83616 in Microeconomics for Abdirahman macalin

Question

Somalia is the biggest producer of banana in the world. Bad weather conditions lead to a very low production. Show the effect on the world's banana market byusing demand and supply curve

Answer 1

If Somalia is the biggest producer of banana in the world and bad weather conditions lead to a very low production, then the world's supply of banana will decrease, the supply curve will shift to the left, the equilibrium price of banana will increase and the equilibrium quantity will decrease.