2006-09-21 16:16:23 · 7 answers · asked by Ashlee 2 in Social Science ➔ Economics
As soon as the outbreak was announced, demand fell, which leads to a fall in the price and quantity of spinach.
At the same time, millions of bags of spinach were pulled from the shelves, reducing supply, or shifting the supply curve to the left. This leads to a fall in the quantity of spinach and would increase price.
These two effects together mean that the quanity of spinach bought and sold definitely decreases, while price may rise (for spinach from the farms that weren't affected by the e-coli), fall (in places where those outside options aren't available), or stay the same, depending on which effect is stronger.
In the long run, demand will rebound quickly, but supply may take longer to recover given the likely penalties the farms will incur (along with the numerous lawsuits, I'm sure).
2006-09-23 06:58:57 · answer #1 · answered by Jenn 2 · 0⤊ 0⤋
Demand has been cut to 0 because of the ecoli outbreak. There is an excess supply, because no one can sell it. Therefore, price would drop to try and stimulate demand, if it were available at all.
2006-09-21 16:25:04 · answer #2 · answered by TXChristDem 4 · 0⤊ 2⤋
The whole spinach demand curve has shifted downward. At any given price people are likely to buy less spinach than they use to.
The supply curve stays the same, so wherever new demand curve intercepts the old supply curve will be the lower price equilibrium.
2006-09-21 23:38:46 · answer #3 · answered by JuanB 7 · 0⤊ 1⤋
Demand for spinach has fallen to nothing. Because the supply has remained the same, the equilibrium price has dropped. Also, because nobody is buying the reduced spinach, there is a huge surplus.
2006-09-21 18:46:53 · answer #4 · answered by Anonymous · 0⤊ 1⤋
demand fell off completely, there is a surplus of spinach world-wide. Beyond that people start making normative statements with value judgments as to what might happen.
2006-09-23 11:37:46 · answer #5 · answered by Adam 4 · 0⤊ 0⤋
What do you prefer to be attentive to!!!? could you be prepared to attend until they have been given some solutions? It occurs. Be happy we've the sturdy clean foodstuff we've interior the US. No equipment is going to be a hundred%. do no longer think of they won't spend thousands and thousands determining what occurred and improve as quickly as back. you are able to desire to work out the numerous stuff they consume in many different international locations.
2016-10-17 10:29:55 · answer #6 · answered by ? 4 · 0⤊ 0⤋
There is not demand ecoli.
2006-09-21 16:20:11 · answer #7 · answered by Anonymous · 0⤊ 1⤋