00:02
Hello, let's consider the market for corn.
00:06
So let me draw this graph.
00:09
We have price, we have quantity, we have demand, demand for corn and supply of corn.
00:23
And there are some changes.
00:25
So let's look what will be the impact of these changes to this market.
00:31
Let's start with a.
00:32
A drought hits corn growing regions cutting the supply of corn.
00:45
So supply of corn decreased.
00:53
Supply decreases.
00:57
But our question is about the demand curve.
01:01
Demand doesn't change in this case.
01:06
We have only the movement along the same.
01:09
Demand curve so the pricing quantity were here and now there here we have just the movement along the same demand curve okay in this case we have a movement so let me raise all these changes in the first case we have movement movement along the same demand curve okay now let's go to the second part the government announces a new subsidy for biofuels made from corn this means now it's more profitable to sell biofuels to sell and produce them because we we can expect the increase in demand for biofuels.
02:24
This means that demand for corn will increase.
02:30
Now producers of this biofuels they will demand more corn.
02:39
So now we have the shift in demand.
02:44
Demand will increase and when demand increases we have a right word shift as we can see there is an increase in demand and at the result we have a right word shift of demand okay let me erase this and write that there is right word shift shift shift okay now the next question is see a global recession reduces the incomes of consumers in poor countries who rely on corn as a staple food assuming corn is a normal good and since it's a normal good when income decreases demand also decreases in this case we have a decrease in demand and the leftward shift of the demand curve.
04:00
Demand curve will shift to the left because of this decrease in demand...