Economics 0455 · IGCSE · Price elasticity of supply (PES)

Price elasticity of supply (PES) — practice question

In some countries, droughts reduced the wheat supply. This pushed wheat prices up, creating a chance for wheat producers in other countries to raise their output. Why could the price of wheat remain high in the year after the drought?

  • ADifferent weather conditions allowed a bumper harvest.
  • BSuppliers unaffected by drought failed to increase output.
  • CThe government introduced a subsidy to wheat producers.
  • DThe wheat market returned to its original equilibrium.

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