Question

Question 9(multiple choice worth 3 points) a hurricane destroys most of the fishing boats on the macro islands but leaves the lobster traps untouched. boats are not needed to collect the trapped lobsters. people enjoy eating fresh fish with tartar sauce and lobster with drawn butter equally. explain the effect of the hurricane on the demand and supply for drawn butter. demand / supply

Answer 1

In the scenario in which a hurricane destroys most of the fishing boats on the macro islands but leaves the lobster traps untouched, all of the people normally eating fish must switch to lobster since the fish supply has decreased dramatically from the hurricane destroying the boats.

The demand for lobster increases and therefore increases the demand for butter.