Cotton Tempts the Farmers
The question
Farmers in the region of Wexford can plant either soybeans or cotton on the same acreage and choose between them each spring. The market for soybeans is initially in equilibrium when the world price of cotton climbs sharply. Assume growing conditions in Wexford are normal and that households' appetite for soybean products is unchanged. Show the effect on the market for soybeans. Show the effect on the Supply and Demand graph.
Drag a curve, or use the arrow buttons. Want the free-play version with every control? Open this graph in the sandbox.
Cotton Tempts the Farmers: the worked answer
On the Supply and Demand graph, Supply shifts left.
Why Supply shifts left
The price of a good that the same producers could make instead is a determinant of supply. When cotton becomes far more profitable per acre, Wexford farmers move land out of soybeans and into cotton, so at every soybean price fewer soybeans are offered and the supply curve shifts left. Growing conditions are normal and households' tastes for soybean products are unchanged, so nothing moves the demand curve.
What happens to the equilibrium
The equilibrium price of soybeans rises and the equilibrium quantity of soybeans decreases.
The mistake students make on this one
Because cotton and soybeans are both crops, students often treat them as substitutes in consumption and shift soybean demand right, the way they would for coffee and tea. Households do not choose between soybeans and cotton at the store; the two goods compete for the farmers' acreage, so the change belongs on the supply side.
On exam day
Ask whether the related good competes for buyers' dollars or for producers' resources: a rival crop grown on the same land shifts supply, a rival item in the shopping cart shifts demand.
How this is graded
The checker reads every curve's position before and after your answer. You are marked correct only when Supply shifts left and every other curve on the Supply and Demand graph stays where it started — the same standard an AP reader applies to a drawn graph: the right shift, and nothing extra. There is no AI involved; the rubric is the geometry.
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