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Consider the following events: Scientists reveal that consumption of oranges decreases
Chapter 4, Problem Problems and Applications 4.11(choose chapter or problem)
Consider the following events: Scientists reveal that consumption of oranges decreases the risk of diabetes, and at the same time, farmers use a new fertilizer that makes orange trees more productive. Illustrate and explain what effect these changes have on the equilibrium price and quantity of oranges.
Questions & Answers
QUESTION:
Consider the following events: Scientists reveal that consumption of oranges decreases the risk of diabetes, and at the same time, farmers use a new fertilizer that makes orange trees more productive. Illustrate and explain what effect these changes have on the equilibrium price and quantity of oranges.
ANSWER:Step 1 of 2
With the revelation of scientists that the consumption of oranges decreases the risk of diabetes, the demand for oranges will increase. At the same time, with farmers using a new fertilizer, making oranges tree more productive, the supply of oranges will also increase, resulting in a new equilibrium quantity and price for oranges.