Illustration graphically and specifying the assumptions upon which your reasoning is based, describe briefly,
1, the effect on on the price and output of fresh maize of adverse weather conditions
When adverse weather conditions occur, such as drought or heavy rainfall, it can have a significant effect on the price and output of fresh maize.
1. Graphically:
On a supply and demand graph, adverse weather conditions would cause a leftward shift in the supply curve. This is because the weather conditions would negatively affect the ability of farmers to produce maize, resulting in a decrease in supply. The graph would show a higher equilibrium price and a lower equilibrium quantity of fresh maize.
2. Assumptions:
- Other factors affecting the price and output of fresh maize, such as changes in technology, government policies, and consumer preferences, are held constant.
- The adverse weather conditions are severe enough to have a noticeable impact on maize production but not to the extent that it completely destroys the crop. In extreme cases of crop failure, the impact on price and output would be even more significant.
- The market for fresh maize is competitive, meaning that there are numerous buyers and sellers and no single entity has the power to influence prices.
Overall, adverse weather conditions lead to a decrease in the supply of fresh maize, causing an increase in its price and a decrease in its output. This can have negative consequences for consumers who rely on maize products, as they may face higher prices and potential scarcity.