Suppose the market for beef cattle was initially in equilibrium .An increase in the price of the fodder used to feed cattle would cause:

Question

Quizplus · Accepted Answer

An increase in the price of fodder used to feed cattle will increase the cost of production for beef cattle farmers, leading to a decrease in the supply of beef cattle in the long run. This is because some farmers may choose to exit the market due to the increased cost of production. As a result, the equilibrium price of beef will increase due to the decrease in supply. Therefore, B is the best answer option. Options A, C, D, and E are incorrect as they do not accurately describe the impact of an increase in fodder price on the market for beef cattle.

Suppose the Market for Beef Cattle Was Initially in Equilibrium