THE DEMAND FOR SWEET

POTATOES IN THE UNITED

STATES
SYNDICATE 7
C.J. SHARON P. 29118134
AUDRY RACHMADIKA 29118135
SRI FERSNEY HEDWINATO 29118169
ANISA AZIZAH 29118195
 DEMAND FUNCTION FOR SWEET POTATOES IN THE
UNITED STATES (1949-1972)

QDs = 7,609 - 1,606Ps + 59N + 947I + 479Pw -271t

QDs = Quantity of sweet potatoes sold per year in the United States per 1,000
hundredweight (cwt)
Ps = real-dollar price of sweet potatoes per hundredweight received by farmers
N = two-year moving average of total U.S. population, in millions
I = real per capita personal disposable income, in thousands of dollars
Pw = real-dollar price of white potatoes per hundredweight received by farmers
t = time trend (t = 1 for 1949, t = 2 for 1950, up to t = 24 for 1972)
 QDs = 7,609 - 1,606Ps + 59N + 947I + 479Pw -271t

indicates that the quantity demanded of sweet potatoes per year in 1,000-
cwt units in the united states (QDs)…

• declines by 1,606 for each $1 increase in its price (Ps)

• increases by 59 for each 1 million increase in population (N) —> demand curve shifts to right
• increases by 947 for each $1,000 increase in real income (I) —> demand curve shifts to right
• increases by 479 for each $1 increase in the real price of white potatoes (Pw) —> demand curve
shifts to right —> (substitute)
• falls by 271 with each passing year (t) —> demand curve shifts to left —> (declining tastes)
 QDs = 7,609 - 1,606Ps + 59N + 947I + 479Pw -271t

actual value of N = 150.73, I = 1.76, Pw = 2.94, and t = 1 for United States for
the year 1949

thus the equation become

QDs = 7,609 - 1,606Ps + 59(150.73) + 947(1.76) + 479(2.94) -271(1)
QDs = 19,306 - 1,606Ps
 QDs = 19,306 - 1,606Ps

to plot the equation, we substitute the value of Ps

Ps QDs

1 17700 Demand Curve

2 16094 21600
3 14488 18000
4 12882 14400
Price

5 11276 10800
6 9670 7200
7 8064 3600
8 6458 0
1 2 3 4 5 6 7 8 9 10
9 4852
Quantity
10 3246
 QDs = 7,609 - 1,606Ps + 59N + 947I + 479Pw -271t

in 1972, actual value of N = 208.78, I = 3.19, Pw = 2.41, and t = 24 for United

States

thus the equation become

QDs’ = 7,609 - 1,606Ps + 59(208.78) + 947(3.19) + 479(2.41) -271(24)
QDs’ = 17,598 - 1,606Ps
 QDs’ = 17,598 - 1,606Ps

to plot the equation, we substitute the value of Ps

Ps QDs

1 15992 Demand Curve

2 14386 19200
3 12780 16000
4 11174 12800

Price
5 9568 9600
6 7962 6400
7 6356
3200
0
8 4750
1 2 3 4 5 6 7 8 9 10
9 3144
Quantity
10 1538
 QDs = 19,306 - 1,606Ps
QDs’ = 17,598 - 1,606Ps

Ps QDs QDs’ the difference is shown in a graph below

1 17700 15992
Demand Curve
2 16094 14386
22500
3 14488 12780

4 12882 11174
18000
13500

Price
5 11276 9568

6 9670 7962 9000

7 8064 6356 4500
8 6458 4750 0
9 4852 3144 1 2 3 4 5 6 7 8 9 10
10 3246 1538 Quantity
QDs QDs’
 QDs = 19,306 - 1,606Ps
QDs’ = 17,598 - 1,606Ps
From the graph we can see that the demand curve of sweet potatoes in1949 and 1972 is different. This
difference caused by several reasons:
• Reduction in tastes for sweet potatoes between 1949 and 1972 tends to shift demand curve to the
left (-6.504 in number)
• Reduction in the price of substitute (white potatoes) also tends to shift demand curve to the left (-
25.387 in number)
• Increase in population tends to shift demand curve to the right (+3.424,95 in number)
• Increase in personal disposable income also tends to shift demand curve to the right (+1.354,21 in
number)

The first two reasons contribute higher number (-31.891) than the remaining two (+4.779,16). In the
equation, this reduction is shown at the constants, 19,306 in 1949 demand function and 17,598 in 1972
demand function.

That is why, overall demand curve in 1972 is shifted to the left, compared with demand curve in 1949.