Graph analysis of demand and supply curves

Reference no: EM1315886

Suppose that the quantity of corn supplied depends on the price of corn(P) and the amount of rainfall (R). The demand for corn depends on the price of corn and the average level of income, Y: The equations describing the supply and demand relationships are

Q_s = 20R + 100P

Q_d = 4000 - 100P + 10Y

Sketch a graph of demand and supply curves that shows the effect of an increase in rainfall on the equilibrium price and quantity of corn. Do price and quantity increase or decrease?

Reference no: EM1315886

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