Consider the global market for barley,an agricultural commodity.Suppose that in August,2014,the equilibrium price and quantity were P = $150 per tonne and Q = 350 million tonnes.In August,2015,the equilibrium price and quantity were P = $168 per tonne and Q = 290 million tonnes.Which of the following is the best possible explanation for this change in market equilibrium?

Question

Quizplus · Accepted Answer

The decrease in quantity (from 350 to 290 million tonnes) and increase in price (from $150 to $168 per tonne) suggest a decrease in supply, as there is less barley supplied at a higher price. This could be due to factors such as weather conditions leading to lower yields or a decrease in the number of barley farmers. The other options (A and C) suggest an increase in demand, which may result in a higher price but also a higher quantity traded, which is not the case here. Option B suggests an increase in supply, which would lead to a higher quantity traded at a lower price, which is also not the case here.

Consider the Global Market for Barley,an Agricultural Commodity