Market: Tomatoes
Over the past few months, parts of East Africa have been experiencing some unfortunate weather. Prolonged heavy rainfall has led to landslides, floods, and ruined tomato crops. Eighty percent of farms in East Africa were affected. The weather is caused by something called the “Indian Ocean Dipole” effect, thought to have been provoked because of climate change.
These weather conditions are making it more expensive for farmers to supply tomatoes. This increase in the cost of factors of production for farmers is decreasing supply and driving prices up for consumers. In Nairobi, one tomato cost 5 US cents about a month ago. Now, it costs between 25 and 35 US cents apiece. That’s up to 7x more expensive.
As is visible in the graph, the change in underlying conditions shifts the supply curve to the left. In effect, the equilibrium price rises and the quantity decreases.
Caution: Economics Students at Work 