fighter said:
if the ban had been on only a given food products among food products the demand would be inelastic example : no enough apples -> people buy more pears instead -> not much impact on prices so on the curve below the equilibrium of apples will move from right to left (and the index of P rises less than 1 times the index of Q lowers)
but since the food ban concerns the entire food offer you can't substitute food with anything else than food - so russia will follow the typical "inelastic" curve again - equilibrium point moves from right to left (and the index of P rises more than 1 times the index of Q lowers)
http://www.investopedia.com/university/economics/economics4.asp
For the quality issue it's simply that competition will not be a problem for either farms and productions nor for distribution. Whatever they get they know they will sell. |
Economy is my speciality, thanks for showing the basics. But as I write in the same post Russia already found the source for the same products, also growing a lot by ourselves.
Your position will be right in an ideal world where Russia produce only gas/oil, and EU produces everything else. And no other countries around. But the real world is different.
Btw, did you heard last Obama's speech about Russia? He was just talking utter bullshit, nothing close to the reality. Who prepares speeches for him???
