Question

Supply an Demand help please!

9. Analyze this set of scenarios that follow using concepts of supply and demand:
a. Suppose that a drought in the western provinces has made grain, and therefore feed, quite expensive. Many ranchers cannot afford to feed their cattle, and have sold much of their herd for slaughter.

Analyze the immediate effect of this event on the equilibrium price and quantity of beef.
b. Chicken is a good that can be substitute for beef.

Analyze the effect that the slaughter of the cattle herds will hav on the equilibrium priceand quantity of chicken

Answer 1

For the beef the price will go down as quantity goes up, and the demand for chicken will go down since consumers can now get chicken for a cheaper price, and since the demand has gone down the chicken still needs to be sold before it spoils, forcing the price of chicken down also.