How is price affected (ceteris Paribus if applicable) if a new and credible health report?
what will occur in the beef, chicken, and leather market, as far as prices are concerned.
Answer:
well clearly demand will shift in the beef market so price should increase there.
if demand increases in the beef market we would figure demand in the chicken market should decrease price down there
leather market is a bit more thought. If we assume the supply of leather is affected by the number of cows killed for food, then more cows eaten implies more leather supplied means increased supply means lower prices in the leather market
Now if the opposite is true - that leather and beef compete for the input cows, then increased beef consumption raises the cost of cows for other things such as leather this means a decrease in the supply of leather and an increase in price in the leather market.
This report should increase the demand for beef, which will increase the price of beef.
Beef and chicken are likely to be substitutes in consumption, so this increase in the price of beef will increase the demand for chicken, which in turn will increase the price of chicken.
Since beef and leather are complements in production, the increase in the price of beef will increase the supply of leather, which in turn will decrease the price of leather.
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