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April 20, 2024, 04:37:38 am
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Author Topic: Effect on equilibrium  (Read 3403 times)  Share 

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LachlanBarr8

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Effect on equilibrium
« on: March 27, 2021, 12:29:10 pm »
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How would you explain the effect on equilibrium price and quantity of "a hailstorm damages the broccoli crop while at the same time a new type of manure becomes available, which increases the yield per acre". I'm not too sure seeing as one is a factor that shifts the supply curve to the left and the other to the right.

Much appreciated
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pahm

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Re: Effect on equilibrium
« Reply #1 on: March 27, 2021, 02:32:57 pm »
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I'm assuming (pls correct me if I'm wrong) that it would have an arbitrary effect on the equilibrium price and quantity, depending the magnitude of the effect by the hailstorm and the new type of manure (eg. if damages of the crop exceeds the effect of the manure, then supply curve shifts left resulting in lower quantity and higher price)
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LachlanBarr8

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Re: Effect on equilibrium
« Reply #2 on: March 27, 2021, 04:16:49 pm »
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Quote from: pahm on March 27, 2021, 02:32:57 pm
I'm assuming (pls correct me if I'm wrong) that it would have an arbitrary effect on the equilibrium price and quantity, depending the magnitude of the effect by the hailstorm and the new type of manure (eg. if damages of the crop exceeds the effect of the manure, then supply curve shifts left resulting in lower quantity and higher price)

Thanks, yeah I was thinking something along those lines too!
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