Supply & Demand Assignment Example

Market: Beef

Source: Alberta meat lovers on the hook as prices rise.

The price of beef in Canada is rising. A hundred pounds of beef costs 11% to 25% more than it did the same time last year. That’s a $20 to $47 price hike to be exact. This is due to a decrease in supply. The supply determinant in effect is costs of factors of production. Production in the US is suffering due to the high prices of cow feed, an input good. The price for feed went up because of the ongoing drought which is hurting crops and harvests all over the West. As a result, the supply curve shifts to the left, the quantity of beef goes down, and price goes up.

Supply and Demand Assignment Zhu