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Question
Which one of the following will cause a rise in the equilibrium price of rice when the demand for rice remains the same?
Options
Government subsidy to rice farmers.
Successful advertising campaign for rice.
Improved rice farming methods.
Poor weather conditions.
Solution
Poor weather conditions.
Explanation:
Rice productivity will fall due to unfavourable weather conditions, shifting the supply curve to the left. Equilibrium prices will rise when the supply curve shifts to the left.
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