ECS1500 ASSIGNMENT 3, FIRST SEMESTER
2022
COMPILED BY RANGA
WHATSAPP 0619441387
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Question 1
The increase in the cost of sunflower seed will lead to an increase in the cost of sunflower production. This
will decrease the supply of sunflowers, ie the supply curve of sunflowers shifts to the left. Without changes
in the demand for sunflower, at the new market equilibrium, the quantity of sunflower traded will decrease
while the price of sunflower goes up. That’s, comparing the new and old equilibrium before the cost of
sunflower seed increased, there is lower equilibrium quantity and higher equilibrium price at the new
equilibrium than the old.
2022
COMPILED BY RANGA
WHATSAPP 0619441387
Email:
Question 1
The increase in the cost of sunflower seed will lead to an increase in the cost of sunflower production. This
will decrease the supply of sunflowers, ie the supply curve of sunflowers shifts to the left. Without changes
in the demand for sunflower, at the new market equilibrium, the quantity of sunflower traded will decrease
while the price of sunflower goes up. That’s, comparing the new and old equilibrium before the cost of
sunflower seed increased, there is lower equilibrium quantity and higher equilibrium price at the new
equilibrium than the old.
