AP Microeconomics 2.1: Changes in Demand

Learn how consumer expectations, preferences, income, and related goods can shift demand and change the equilibrium price and quantity.

[Maximum number: 1]

Soja Farm is a typical profit-maximizing firm that produces and sells soybeans in a constant-cost, perfectly competitive market that is in long-run equilibrium. The market equilibrium price of soybeans is $ 14 per bushel.

Soybeans are used as an input in the production of tofu. Tofu now becomes a more popular food option among consumers. On your graphs in part (a), show the short-run effect of the increased popularity of tofu on each of the following.

The new market equilibrium price and quantity of soybeans, labeled $\mathrm{P}_{2}$ and $\mathrm{Q}_{2}$ , respectively

(i) The market graph from part (a) must show a rightward shift of the market demand curve and the new equilibrium price labeled $\mathrm{P}_{2}$ and the new equilibrium quantity labeled $\mathrm{Q}_{2}$ .

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MKT-3.B—Explain (using graphs as appropriate) buyers’ responses to changes in incentives and constraints question 1