Question

suppose that china announces that it will lift import restrictions on US soybeans beginning in November....

suppose that china announces that it will lift import restrictions on US soybeans beginning in November. Show what will happen in the market today (at the time of the announcement) and "tomorrow" when the restrictions are lifted. Use separate graphs for "today" and "tomorrow" and explain whether current and future prices move together or not.

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when China announces that it will lift import restriction from U.S soybeans , it will decrease the demand for today since people will think that price will decrease in future or in november since the import restriction will decrease as the result the demand for soybeans will decrease today and equilbruim price will decrease and quantity also decrease.

in future when import restriction will lift, then the import of soybeans will increase as the result, the quantity supplied will increase thus supply curve will shift to the right , and when the supply increase , it will decrease the equilbruim price and increase the equilbrium quantity.

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