Timothy’s Supply and Demand Assignment

Market: Potatoes

Source: http://www.potatopro.com/news/2016/australia-facing-potato-shortage-prices-rise

The price of potatoes in Australia has drastically gone up. A ton of potatoes previously usually cost $400 but now it usually costs $1500 and sometimes even up to $4000. This is a price increase between 325% and 900% of the usual value. This is due to a decrease in supply while demand has not changed. The supply determinant is cost of factors in production. Exceptionally wet weather has caused this. The machinery is unable to traverse the wet ground and  the difficulty of removing the wet dirt off of a potato without ruining it. This causes the supply curve to shift left, reducing the quantity of potatoes and increasing prices.

Supply and Demand Graph

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