Draw the graph · Micro · Supply and demand
Drought and a diet shift
Drag a curve sideways, or use its arrows. A curve you do not move is a curve you are saying stays put. Make each shift clear enough that a reader could see it.
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Demand shifts left. Supply shifts left.
The drought cuts what ranchers can offer at every price, so supply shifts left. The diet trend cuts what buyers want at every price, so demand shifts left. Both shifts lower quantity. The supply shift raises price and the demand shift lowers it, so the net effect on price depends on which shift dominates.
Quantity falls for certain, while price may rise or fall depending on which shift is larger.
Common mistake. Students often reason 'drought means higher prices' and stop there. That is only half the story. With demand also falling, the price change is ambiguous and only the fall in quantity is certain.
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Lesson: Double Shifts