Thanks to Jason Welker for this timely article and idea. Since we just studied Supply Determinants, remember:
S - Subsidies and Taxes
T - Technology
O - Other goods
N - Number of sellers
E - Expectations
R - Resources, raw materials
Using your knowledge of the determinants of supply, analyze what is happening to the market for pork in China. Several of these determinants are at work here. Which way is the supply curve for pork shifting, and why? Also since the price of pork is going up, what effect will it have on the demand for other items? Remember substitutes and complements.
36 comments:
I think the supply curve for pork is shifing to the left due to resources. Diseases and other factors are harming the market for pork. Also, since the price of pork is rising, the demand for the corn meal used to feed the pigs will go down due to related good. (Pigs and corn meal are compliments).
even with the price of the pork rising, the demnd for it is still as high es ever. But with the lack of quanityt comes a pig shortage. With corn being so expensive, and disease they farmers are unable to keep up with the demand. But with the goverment helping won't that create even more of a shortage or a surplus. according to price ceiling and floor?
Well Corn suppliers have two choices in this instance, make pork feed, or supply for ethanol production. It seems more and more they get cacught up in making money short term so they pick trendy ethanol, but less corn to use means less resources for feed, meaning less pork, meaning higher priced pork meaning growing demand for chicken, turkey and maybe beef thus leading suppliers to raise cost in said products over all making the meat market more expensive, but it is a judgement call. enviornmental fuel or sustenence?
The supply curve for pork is shifting left due to a change in resources, especially corn. The supply curve for corn is shifting left due to a change in other goods, caused by facilities opting to produce ethanol rather than food. Demand for other meats will probably go up to compensate for the increased pork prices.
the question is what should be given more importance, the production of ethanol or the meat market? well, even if ethanol production is lowered or stopped, that doesn't necessarily mean that the pork problem will go away, disease and other things are adding to the problem. I think the demand for pork will not change too much, but demand for oter meats will go up.
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