97 billion bushels to be harvested instead of 1479

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months, there will only be 12.97 billion bushels to be harvested instead of 14.79 billion bushels. The last factor to effect supply deals with changes in the taxes on producers of their good and government regulations. Sometimes the government will place taxes solely on the producers, causing an increase in price per unit. When it costs the producers more to make their good, they wont be able to produce the same quantity and supply will decrease. When any of these factors come into play, supply will increase or decrease and cause shifts with Pe and Qe. There will be an increase in supply when there is more competition, when producer expect to sell more of their product, an advancement in technology, the resources drop in price, there aren’t any negative exogenous factors or taxes on the producers are lowered. When the increase in supply occurs, the supply curve shifts to the right. As the curve shifts to the right the Pe will drop and the Qe will rise. This means the price in the product will decrease and the quantity of the product increases. However, sometimes supply decreases. If you take all the scenarios listed above and think of them in the opposing manner the supply curve will decrease. When the curve decreases, it shifts to the left. The Pe or price of the product will increase and the Qe or quantity of the product will decrease. When reading the article, “U.S. Corn-Crop Forecast Cut As Drought Dims Supply Outlook,” it is explained that the supply of corn will decrease drastically this year. The
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article points out that the cause of this decrease is in result of the dry weather the country has faced over these past few months. Being that weather is what is causing the shift in supply of corn, it is inferred that this is an exogenous factor. It is also inferred that supply is decreasing with the negative effects of this exogenous factor. I am able to conclude that with this decrease in supply of corn, the Pe will increase and the Qe will decrease and overall, the supply curve is shifting left.
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