Question

Using Supply and Demand Diagrams explain how the supply and/or demand for beef and grain are related. Bumper grain crops this year will further encourage meat production.

Answer 1

Ans) Firstly, when price of raw material changes, supply changes and there is a shift in supply curve.

Now, grain can be considered as input for beef market because if cattles are fed properly, there will be sufficient meat to supply. And if cattles are not fed properly, there will insufficient meat. Further, feeding cattles depends upon the price of grains.

Therefore, when there is bumper grain crop, price of grain will reduce. As a result, input cost for beef will also reduce and supply of beef will increase. (Opposite will happen if there is famine or drought or any other event which reduces production of grains.)