Question

The disappearance of anchovies off the coast of Peru in 1972 caused a scramble for the protein-rich substitutes, notably soybeans. Because soybeans are used in cattle feed, higher soybean prices eventually were translated into higher cattle prices. Use demand and supply curves to illustrate what happened in the anchovy, soybean, and cattle markets. Indicate shifts in the various curves and the effects on equilibrium price and quantity for each market.

Draw the graph.

Answer 1