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In the summer of 2000, unusually good weather, heavy rains, cooler ocean temperatures, and calm seas, boosted salmon breeding and fishing conditions off the California coast. This shifted the salmon supply curve from S0 to S1, while demand for salmon stayed the same. The original equilibrium price was $3.25 per pound at a quantity of 250,000 fish. What happened to the new equilibrium price and quantity?

APrice rose to $3.50 and quantity fell to 200,000
BPrice fell to $2.50 and quantity rose to 550,000
CPrice fell to $2.50 and quantity also fell to 200,000
DPrice rose to $3.50 and quantity also rose to 550,000
Answer & Solution
Correct answer: B. Price fell to $2.50 and quantity rose to 550,000
1. Good weather is a natural condition, so it is a supply-side event, not a demand-side event. 2. Good weather increases the quantity fishers can supply at every price, shifting the supply curve right from S0 to S1. 3. A rightward supply shift moves the new equilibrium down along the unchanged demand curve. 4. Reading the new intersection gives a lower price, $2.50, and a higher quantity, 550,000 fish. 5. Options A and D have the direction backward, and option C gets the quantity direction wrong. _Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.3 | Changes in Equilibrium Price and Quantity: The Four-Step Process_
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