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Assume lettuce and spinach are substitutes. Suppose 20% of the lettuce crop is destroyed by flooding. The floods that destroyed part of the lettuce crop would have caused the equilibrium price of spinach to ___________.

Respuesta :

Answer:

The correct answer is: increase.

Explanation:

Because lettuce and spinach are substitutes, the quantity supplied of one of them will affect the quantity supplied of another. If there is less quantity supplied of lettuce because of a flood, there will be more quantity supplied of spinach to offset the increasing quantity demanded in spinach. If there is more quantity supplied in spinach, the equilibrium price of spinach will increase.