One possible effect of the increased reliance on cheap imported rice is the decrease in the demand for locally produced palay, ceteris paribus. If this happens, the demand for palay will shift to the left. Based on Figure 1, identify the TR, TR’ and ΔTR of the sellers at the farm evel

One possible effect of the increased reliance on cheap imported rice is the decrease in the demand for locally produced palay, ceteris paribus. If this happens, the demand for palay will shift to the left. Based on Figure 1, identify the TR, TR’ and ΔTR of the sellers at the farm evel

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 25RQ: How does one analyze a market where both demand and supply shift?

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Question

One possible effect of the increased reliance on cheap imported rice is the decrease in
the demand for locally produced palay, ceteris paribus. If this happens, the demand for
palay will shift to the left. Based on Figure 1, identify the TR, TR’ and ΔTR of the sellers
at the farm evel

Figure 1. Palay Market at the Farm Level
P
S
P
P'
0
b
D
D'
Q'Q
Figure 2. Rice Market at the Retail Level
P
P
P'
0
ad
Q'
S
S'
D

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