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Demand & Supply Fundamentals
SITUATION
December, 2006, was a difficult month for Colorado's beef industry. Multiple heavy snow storms caused thousands of beef cattle to be stranded in nose-high snow drifts. They could not get food or water for themselves. In spite of valiant attempts by the National Guard to drop hay, many died. Beef market prices in the spring were predicted to rise. The series of unfortunate events continued: after the spring thaw, Colorado cattlemen experienced a couple of cases of mad-cow disease. Beef market prices fell (contrary to the earlier prediction).
Diagram in (a) the initial impact of the bad winter on the price and quantity. Then, on the same grid, incorporate the impact on price and quantity of the mad-cow cases. Be sure that your final diagram indicates a market price decrease.
Using economic terminology, write a statement in (b) explaining the results of your graphical analysis in (a).
a) GRAPHICAL ANALYSISb) WRITTEN
Attachment:- Demand and Supply Fundamentals.rar
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