Question

A severe drought results in a drastic fall in the output of wheat. Analyse how it will effect the market price of wheat?

Answer 1

during a natural calamity.....the total production of food grains decreases leading to shortage of food .....due to shortage of food the prices rise up making the poor not able to afford that food....so bcoz of the natural calamity the market price of the wheat will gradually Increase as there is shortage of its grains