Price Elasticity of Demand Essay Example | Topics and Well Written Essays - 500 words - 1

Price Elasticity of Demand - Essay ExampleConsequently there would be a decrease in demand for soybean, thereby a reduction in the demand for soybean. As soybean is a substitute for edible corns, people would prefer the corns everywhere the soybeans because of its use as an alternative energy source. In respect of the accompaniments at hand when the farmers would look at the fact that there is an amplificationd demand for corn by way of the demand curve shifting to the right and the fact that there has been a market in equilibrium because of the fact that there has been an increase in demand thereby the quantity demanded is more than then the quantity supplied and therefore there is a disparity between the two. Furthermore due to the fact that the ram material cosmos used is the same it would not take much time to switch to produce corns instead of soybeans. Therefore the incentive of the change magnitude price would allow certain producers to switch to produce corns thereby inc reasing the quantity supplied meeting the level where the quantity demanded is equal to the quantity supplied thereby compass new market equilibrium. The price of corn oil because of the increase in demand and the fact there has been a shortage in the quantity that is being supplied thereby creating disparity between the quantity demanded and the quantity supplied.