Question

Rain delays to U.S. planting lift corn and soybean prices Price (dollars per bag) Heavy rain has delayed the planting of con and soybean and soggy conditions have slowed the winter wheat harvest So Source: Financial Times, June 25, 2015 Use the supply and demand model to illustrate how the markets for corn, soybean, and wheat will change. The graph shows the market for soybean. Draw a curve to show the effect heavy rain will have on the market for soybean. Label it. Draw a point to show the new equilibrium price and new equilibrium quantity. 5.80 Do 700 00 400 8001000 Quantity (millions of bags) >>>Draw only the objects specified in the question.

Answer 1

since the heavy rain have delayed, the planting of soybean and corn, so the supply of soybeans will decrease and therefore supply curve will shifts leftward from So to S.

Quantity (Millions of bags.) New Equilibrium price = p* New Equilibrium quantity = Q* since the heavy rain have delayed, the planting of soybean and corn, so the supply of soybeans will decrease and therefore supply curve will shifts leftward from So to S. Hence new equilibrium price is P* and equilibrium quantity is Q*. Here the equilibrium price increase and equilibrium quantity decrease.

Hence new equilibrium price is P* and equilibrium quantity is Q*.

Here the equilibrium price increase and equilibrium quantity decrease.