Answer to Question #92509 in Accounting for Neo

Question

You notice two price relationships : when there is a drought the price of maize rises, when the price of potatoes goes up, the price of bread also increases. use a supply and demand diagrams to explain these two relationships

Answer 1

If the price of maize rises as a result of a drought, then the supply of maize increases. If both the price of potatoes and the price of bread increase, then the income of consumers increased, so the demand for these products increases.