Question

supply and demand curve and explain:

The drought in the plain states has made grain, and therefore feed, quite expensive. Many ranchers cannot afford to feed their cattle, and have sold much of their herd for slaughter.
What will be the immediate effect of this event on the equilibrium price and quantity of beef?
Chicken and beef are substitute goods. Illustrate the effect that the slaughter of the cattle herds will have on the equilibrium price and quantity of chicken

Answer 1

It is given that many ranchers have sold much of their herd for slaughter. This indicates that there will be an increased supply of beef in the market which will shift the supply curve to the right. The equilibrium price will fall and the equilibrium quantity will increase as a result.

Now that beef is cheaper to purchase consumers who are substituting beef and chicken will now prefer to purchase more beef and less chicken. This decreases the demand for chicken and therefore shift the demand curve to the left. The new equilibrium price and quantity of chicken are both reduced.