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 = $140 per tonne and Q = 325 million tonnes.Which of the following is the best possible explanation for this change in market equilibrium?

Question

Quizplus · Accepted Answer

The decrease in both price and quantity from 2018 to 2019 suggests a decrease in demand for barley. An increase in supply would have led to a lower price but a higher quantity, while a decrease in supply would have led to a higher price and lower quantity. An increase in demand would have increased both price and quantity.

Consider the Global Market for Barley,an Agricultural Commodity