Problem 1:Between 2006 and 2009, Chinese imports of US 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 increased demand, the equilibrium price of pecans increased by about 50 percent, increasing the price of pecan pie, a holiday favorite.

Use a demand and supply graph to illustrate the effects of the increase in the demand for pecans from Chinese consumers. Assume that the, initial equilibrium price is $6 per unit.