What will happen to the equilibrium quantity and price of potatoes if the population increases and a new, higher-yielding variety of potato plant is developed?

The equilibrium quantity of potatoes is likely to increase if population grows and a higher-yielding potato variety is introduced, while the equilibrium price depends on the relative shifts in supply and demand curves. A greater increase in supply than demand would result in a lower price, whereas a greater demand increase relative to supply would raise the price.

Explanation:

When considering what will happen to the equilibrium quantity and price of potatoes if the population increases and a new, higher-yielding variety of potato plant is developed, we need to analyze how both demand and supply curves are affected. An increase in population leads to an increase in demand for potatoes, shifting the demand curve to the right. This would generally cause the equilibrium price to rise and quantity to increase.

However, the introduction of a higher-yielding variety of potato would increase the supply, shifting the supply curve to the right, potentially lowering the price and increasing the quantity.

The overall effect on equilibrium price and quantity would depend on which curve shifts more significantly. If the increase in supply due to the introduction of the new potato variety is larger than the increase in demand from the growing population, the equilibrium price would fall while the equilibrium quantity would rise.

Conversely, if the demand increases more significantly than the supply, the equilibrium price would rise, and the quantity would increase, but at a slower rate.

In historical contexts, such as during the Irish potato famine, prices significantly spiked due to reduced supply, despite falling consumption, debunking the notion that the quantity demanded of the potato increased with rising prices, a situation that would suggest potatoes were a Giffen good.

In current times, if both supply and demand shift to the right, such as in the production of organic foods, we could see an increase in equilibrium quantity, but the impact on price would depend on the relative shifts of supply and demand curves.