Application: Demand elasticity and agriculture

The following graph illustrates the market for pistachios. It plots the monthly supply of pistachios and the monthly demand for pistachios. Suppose an increase in pests destroys a major portion of pistachio trees.

Show the effect this shock has on the market for pistachios by shifting the demand curve, supply curve, or both.

Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.

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