The following appeared in a Florida newspaper a week after a hurricane hit the state. "Floridians are relieved that the storm produced no fatalities but homeowners face weeks, if not months, of rebuilding. Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane's path. Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent." Which of the following offers the best explanation for the price increases referred to in the article?

a. The hurricane created an artificial shortage of building materials.
b. The hurricane caused an increase in the demand for building materials.
c. There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm.
d. The hurricane reduced the number of suppliers of building materials.

According to the text, the hurricane did not produce any fatalities but did cause damage to houses, which made homeowners face weeks, if not months, of rebuilding. As a result, there was an increase in the demand for building materials. The supply-demand relation can be demonstrated in the attached figure. An increase in the demand makes a right-shift of the demand curve. Given that the supply remains constant, the price will increase.

Option A, C and D are incorrect as the text did not mention the supply side of building materials yet.