Question

During the summer of 1993, sever flooding in the Unites States destroyed corn and wheat and in 1994sever flooding in the southeast destroyed a large portion of the peanut crops. Use supply and demand diagrams to show the effect of this flooding if the demand of peanut is elastic while the demand of corn and wheat is inelastic. Explain the difference and make predictions concerning farm incomes in light of these disasters.

Answer 1