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Which one of the following is the most likely effect of these floods on the market for potatoes? A The demand for potatoes will increase B The demand for potatoes will decrease C The price of potatoes will increase D The price of potatoes will decrease - Edexcel - GCSE Business - Question 14 - 2015 - Paper 1
Question 14
Which one of the following is the most likely effect of these floods on the market for potatoes? A The demand for potatoes will increase B The demand for potatoes w... show full transcript
Worked Solution & Example Answer:Which one of the following is the most likely effect of these floods on the market for potatoes? A The demand for potatoes will increase B The demand for potatoes will decrease C The price of potatoes will increase D The price of potatoes will decrease - Edexcel - GCSE Business - Question 14 - 2015 - Paper 1
Step 1
The price of potatoes will increase
Answer
In the aftermath of floods, the supply of potatoes is likely to be disrupted due to damage to crops. With less supply available in the market, the laws of supply and demand suggest that as the supply decreases, the price of the remaining potatoes will increase. Therefore, the most likely effect is that the price of potatoes will increase.