Between 2006 and 2009 the equilibrium price of pecans increased by roughly __________ (15, 50, 70) percent, a result of increased __________ (demand, supply) from China. (Related to Application 4)

Transcribed Image Text:

Application 4 CHINESE DEMAND AND PECAN PRICES APPLYING THE CONCEPTS #4: How does a change in demand affect the equilibrium price? Between 2006 and 2009, Chinese imports of U.S. pecans increased from 9 million pounds per year to 88 million pounds. The increase in demand from China is roughly 30 percent of the total annual crop. The increase in demand was caused in part by widespread reports in the Chinese media that pecans promote brain and cardiovascular health. As a result of the increase in demand, the equilibrium price of pecans increased by about 50 percent, increasing the price of pecan pie, a holiday favorite. Related to Exercises 4.6 and 4.10.