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10 Supply and Demand Practice Questions

By Mike Moffatt, About.com

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10 Supply and Demand Practice Questions - Question 3

Question 3: Beef supplies are sharply reduced because of drought in the beef-raising states, and consumers turn to pork as a substitute for beef. How would you illustrate this change in the beef-market in supply-and-demand terms?

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Answer: The supply curve for beef should shift leftward (or upward), to reflect the drought. This causes the price of beef to rise, and the quantity consumed to decrease.

We would not move the demand curve here. The decrease in quantity demanded is due to the price of beef rising, due to the shift of the supply curve.

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