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    Determining whether prices of farm products have changed

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    The U.S. Department of Agriculture, http://www.usda.gov/nass, publishes charts on the prices of farm products. Go to the USDA home page and select Charts and Maps and then Agricultural Prices. Choose three farm products of your choice and determine whether their prices (as measured by "prices received by farmers") have generally increased, decreased, or stayed the same over the past 3 years. In which of the three cases, if any, do you think that supply has increased more rapidly than demand? In which of the three cases, if any, do you think that demand has increased more rapidly than supply? Explain your reasoning.

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    Solution Preview

    In 2003 the price of corn was about $2.40 a pound, and now it is $2.25. This would suggest that supply has increased more rapidly than demand. If you graph the demand and supply curves, you can see that when the supply ...

    Solution Summary

    Determining whether prices of farm products have changed in past three years due to shifts in supply or demand.

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