As a result of an outbreak of mad cow disease, the supply of beef to the...
As a result of an outbreak of mad cow disease, the supply of beef to the market has dropped substantially in the short-run. As a substitute for beef, what should you expect to happen to the demand for pork? Use graphs to show your work.
Homework Answers
The major outbreak in mad cow disease will reduce the supply of beef in the market. So, the supply curve of beef will shift to the left as shown in the below figure a. Due to reduced supply, the prices of beef will eventually increase. People will stop buying beef as it is more costly now and start looking for alternatives.
Pork, being considered as the substitute for beef, will have higher demand as it is cheaper than the expensive beef available. As a result, people start purchasing more pork and the total demand for pork will increase. This will shift the demand for pork to right as shown in figure b.
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