ATAR Notes: Forum

VCE Stuff => VCE Business Studies => VCE Subjects + Help => VCE Economics => Topic started by: LachlanBarr8 on March 27, 2021, 12:29:10 pm

Title: Effect on equilibrium
Post by: LachlanBarr8 on March 27, 2021, 12:29:10 pm

How would you explain the effect on equilibrium price and quantity of "a hailstorm damages the broccoli crop while at the same time a new type of manure becomes available, which increases the yield per acre". I'm not too sure seeing as one is a factor that shifts the supply curve to the left and the other to the right.

Much appreciated

Title: Re: Effect on equilibrium
Post by: pahm on March 27, 2021, 02:32:57 pm

I'm assuming (pls correct me if I'm wrong) that it would have an arbitrary effect on the equilibrium price and quantity, depending the magnitude of the effect by the hailstorm and the new type of manure (eg. if damages of the crop exceeds the effect of the manure, then supply curve shifts left resulting in lower quantity and higher price)

Title: Re: Effect on equilibrium
Post by: LachlanBarr8 on March 27, 2021, 04:16:49 pm

Quote from: pahm on March 27, 2021, 02:32:57 pm

I'm assuming (pls correct me if I'm wrong) that it would have an arbitrary effect on the equilibrium price and quantity, depending the magnitude of the effect by the hailstorm and the new type of manure (eg. if damages of the crop exceeds the effect of the manure, then supply curve shifts left resulting in lower quantity and higher price)

Thanks, yeah I was thinking something along those lines too!