The market for soybeans is initially in equilibrium. Because of mad cow disease, producers decide to replace bone meal with soybeans in cattle feed. The likely effect is that:
A)the equilibrium price and quantity of soybeans will rise.
B)the equilibrium price and quantity of soybeans will fall.
C)the equilibrium quantity of soybeans will rise, but we can't determine what will happen to the equilibrium price.
D)the equilibrium price of soybeans will rise, but we can't determine what will happen to the equilibrium quantity.

Question

Quizplus · Accepted Answer

The increase in demand for soybeans as a substitute for bone meal will shift the demand curve for soybeans to the right, leading to an increase in both equilibrium price and quantity of soybeans.

The Market for Soybeans Is Initially in Equilibrium