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Question
A drought in India leads to unusually low level of wheat production. This would lead to a rise in the price of wheat and fall in the quantity of wheat demanded due to ____________.
A drought in India leads to unusually low level of wheat production. This would lead to a rise in the price of wheat and fall in the quantity of wheat demanded due to ____________.
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Solution
The correct option is A excess demand at the original price
A drought in India leads to unusually low level of wheat production. This would lead to a rise in the price of wheat and fall in the quantity of wheat demanded due to excess demand at the original price. Excess demand means when the price is low customers demand a lot, this leads to excess demand also because the supply is less hence, price has to be increased to bring the economy in equilibrium.
A drought in India leads to unusually low level of wheat production. This would lead to a rise in the price of wheat and fall in the quantity of wheat demanded due to excess demand at the original price. Excess demand means when the price is low customers demand a lot, this leads to excess demand also because the supply is less hence, price has to be increased to bring the economy in equilibrium.
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