Consider the global market for barley,an agricultural commodity.Suppose that in August,2018,the equilibrium price and quantity were P = $150 per tonne and Q = 350 million tonnes.In August,2019,the equilibrium price and quantity were P = $150 per tonne and Q = 410 million tonnes.Which of the following is the best possible explanation for this change in market equilibrium?

Question

Quizplus · Accepted Answer

The equilibrium price remained the same, but the quantity increased. This suggests that both demand and supply increased. An increase in demand alone would typically increase the price, while an increase in supply alone would typically decrease the price. The fact that the price stayed the same while the quantity increased indicates that both supply and demand must have increased.

Consider the Global Market for Barley,an Agricultural Commodity