A cheese glut is overtaking america

ECON5315 TAMU Alcoa Details Plans To Split Into Two Companies
Subject
Economics

School
Texas AM University

Question Description
Part 1. Based on the article “Alcoa Details Plans to Split Into Two Companies - WSJ" - i attacked in files below.. answer 3 questions below: (each atleast 150words)

i. Which market is Alcoa exiting? Why? [That is: What issues are leading to this decision?]

ii. Describe any barriers to exit you would expect Alcoa to face.

iii. Will this exit be likely to hurt company profits in the short run? In the long run?

Part2: Make 2 replies for 2 discussions below (each one atleast 150words).. please provide charts, pictures, sources if necessary

Jay:

Question 1: What is happening to the demand for US-produced cheese? Why?

The demand for US produced cheese is on the rise. According to the latest Livestock, Dairy, and Poultry Outlook, US cheese demand appears to be solid, up 1.4% from June 2017 to 2018 and up 6.2% since May (Mielke, 2018). According to Gee’s article, American’s eat an average of 36 pounds of cheese a year apiece (Gee, 2016). This is spurred by recent declines in the prices of US produced cheeses. As the prices for cheese continue to fall, cheesemakers are trying to soften the blow of declining prices by attempting to sell more. For example, retail prices for cheese were down 4.3% in April 2016. As the demand for milk declines the supply of cheese continues to rise creating a surplus. According to the Department of Agriculture, the US currently has 1.39 billion pounds of cheese in storage (Akhtar, 2018). Extra cheese means lower prices. This increase in supply and unchanging or rising demand will likely result in a lower equilibrium price and a higher equilibrium quantity.