Potato crops in Idaho have been damaged by plant disease, causing a scarcity of potatoes in the market. What is the most likely effect of the scarcity?


AThe price of potatoes will decrease.


BThe demand for potatoes will increase.


CThe demand for potatoes will decrease.


DThe price of potatoes will increase.

Verified Answer :

Most likely the answer will be D.

The correct answer is D.

When a market is in equilibrium and suddenly the product (potatoes) becomes scarcer, this means that the amount supplied has decreased and therefore the producer cannot serve the same level of demand as before. Therefore, the price will increase until the quantity demanded equals the new amount supplied, as less consumers will be willing to purchase the product as prices become higher.