In 2019, China was struggling with African swine fever, which killed more than 1 million pigs in China. Consider the market for pork. Ceteris paribus, what happened to Chinese firms' willingness-to-produce pork and to the amount of producer surplus, assuming demand held steady and the market sells at the equilibrium price?

Question

Quizplus · Accepted Answer

The outbreak of African swine fever led to a significant decrease in the supply of pigs, which would decrease firms' willingness to produce pork due to the reduced availability of pigs and likely increase production costs. With a decrease in supply and steady demand, the equilibrium price of pork would increase, leading to a decrease in producer surplus because the firms that are still able to produce are doing so at higher costs and potentially in smaller quantities.

In 2019, China Was Struggling with African Swine Fever, Which