For each event explain how the event would affect price, supply and demand of the product listed:
Two days before Thanksgiving the market has many unsold turkeys.
Drought forces ranchers to rush their cattle to market.
High supply, therefore low prices.
Two days before Thanksgiving, the market having many unsold turkeys can have the following effects on price, supply, and demand of the product:
1. Price: The price of turkeys is likely to decrease. When there are many unsold turkeys just before Thanksgiving, sellers may lower their prices in order to attract buyers and clear their inventory. As a result, the excess supply of turkeys creates downward pressure on prices.
2. Supply: The supply of turkeys is likely to exceed the demand. With many unsold turkeys in the market, the supply of turkeys will surpass the amount that consumers are willing to purchase. This surplus supply can lead to a buildup of inventory for sellers.
3. Demand: The demand for turkeys may remain steady or decrease slightly. While Thanksgiving is traditionally associated with consuming turkey, the excess supply of turkeys could lead to a decrease in demand as consumers may have already purchased their turkeys or opt for alternative options. However, there may still be some buyers who take advantage of the lower prices.
Regarding the event where a drought forces ranchers to rush their cattle to market, it can have the following effects on price, supply, and demand of the product:
1. Price: The price of cattle may initially decrease due to an increased supply. Ranchers, facing a drought, may have to sell their cattle earlier than usual to reduce the burden on limited resources. This sudden influx of cattle into the market can lead to lower prices as sellers try to offload their livestock quickly.
2. Supply: The supply of cattle is likely to increase. With ranchers rushing their cattle to market due to the drought, the supply of cattle will be higher than usual. This surplus supply can contribute to the downward pressure on prices and potentially result in excess inventory.
3. Demand: The demand for cattle can be influenced by various factors. If the drought affects other regions or countries as well, the overall demand for cattle might decrease due to reduced feed availability and economic hardships. However, if the drought is localized, the demand might remain relatively stable as consumers still require beef for consumption. The reaction of demand will depend on the severity and geographical reach of the drought.