Whether you like to eat hamburger or roast beef, the source
of the meat is a rancher who raises cattle. A news story discussed
how years of drought had raised the cost to ranchers
of raising cattle. At the same time, consumer tastes have
been changing, leading to a decline in the demand for beef.
Use demand and supply graphs to illustrate your answers to
the following questions:
a. Can we use this information to be certain whether
the equilibrium quantity of beef will increase or
decrease?
b. Can we use this information to be certain whether
the equilibrium price of beef will increase or
decrease?