Reference no: EM133078773

Question 1

Soybean prices have rallied sharply, and that's generating more interest in planting the crop this spring. But corn and wheat continue to draw attention, too.

"We've had down prices for a number of years and all of a sudden we get a big rally. So, there's more interest in soybeans now," said Iverson, who's also national secretary of the United Soybean Board, in which volunteer farmer-leaders administer soybean checkoff
activities focused on research and market development.

By all accounts, the question isn't whether U.S. farmers will plant more acres to soybean this spring. Rather, it's how many additional acres will be devoted to beans. More will be known in late March, when the U.S. Department of Agriculture releases its widely watched annual Prospective Plantings report.

A look at prices reveals why soybeans have become more popular. The average U.S. price received for soybeans shot from $8.28 per bushel in May 2020 to $10.90 per bushel in January 2021, the last month for which official U.S. Department of Agriculture statistics are available. The January 2021 price is the highest beans have been since late 2014.

By Jonathan Knutson - Mar 15, 2021.

Source: https://www.agweek.com/business/agriculture/6909120-Soybeans-price-surge- draws-extra-planting-interest

Required:

a. Discuss FOUR (4) factors separately that caused the fluctuation in the equilibrium price of soyabean based on actual events within the last five years using a demand and supply diagram.

b. The short-run price elasticity of demand for soyabean is 0.21. The quantity demanded for soyabean is 4.0 billion bushels at the current price $10.90 per bushel. Calculate the quantity demanded if the price per bushel is $11.00.

c. Discuss ONE (1) factor that influence the price elasticity of demand.