Answer to Question #322985 in Microeconomics for Rosey Boo

Question

The population in country C decreases, due to a lower birth rate. At the same time, there is an increase in the cost of fertilizer, which is used to grow vegetables. Explain how the market for vegetables will be affected by these changes. Clearly indicate how the equilibrium price and equilibrium quantity will be affected by these changes. Make use of a combination of diagrams and verbal explanation to explain your answer. Note that your diagrams should be properly annotated and that marks will be deducted for any missing labels on your diagram.

Answer 1

Population is a essential element in every country's economy.It acts as both a producer and consumer in the country's market and thus plays important role in supplying and demanding respectively.

For vegetables population provide labour an thus contributing to supply and also consume the same vegetables and thus demanding

Population decrease will result in fall of vegetables market since the supply and demand drops.

Cost of fertilizer is a factor of production of vegetables and increasing it cost makes production expensive and thus lowers supply