Fishing for king crabs for a living is risky business. Their migration habits along the Bering Strait are just not understood. The king crabs seem to disappear one year but return mysteriously a few years later, wreaking havoc on the income of crabbers. When crabs disappear, consumers buy lobster instead. What best describes this situation in the king crab market?
A. The supply curve shifts to the left when crabs disappear, (their price rises) and the demand curve shifts to the left when consumers substitute lobster for crab (lowering their price). The supply curve then shifts to the right when crabs reappear (their price declines).
B. The price of crab rises when crabs are scarce creating excess demand. The price of crab falls when crabs are abundant creating excess supply.
C. The quantity of crab falls and then rises as crabs disappear and reappear in response to shifts in demand. Demand shifts to the left as consumers substitute toward lobster when crab is scarce and shift to the right when crab is abundant.
D. The supply curve shifts to the left when crabs disappear (their price rises) and shift to the right when they reappear (their price declines).
Answer: D
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