1. According to the National Hog Farmer, the per-capita beef consumption in the US, on a retail weight basis, has dropped from 95 lb. in 1976 to 65 lb. in 1999.

a. Show the short-run effect of declining demand for beef in diagrams for the beef market and an individual farmer. Assume the market begins at its long run equilibrium. In words, explain all of the changes you can identify.

b. With the help of a new diagram, explain the long-run effect of declining demand for beef. Particularly, explain what account for the differences between the short-run and long-run effects. You may assume the beef industry is a constant cost industry.