Download the App!
Get 24/7 study help with the Numerade app for iOS and Android! Enter your email for an invite.
Consider the following events: Scientists reveal that eating oranges decreases the risk of diabetes, and at the same time, farmers use a new fertilizer that makes orange trees produce more oranges. Illustrate and explain what effect these changes have on the equilibrium price and quantity of oranges.
Solved by verified expert
This problem has been solved!
Try Numerade free for 7 days
Official textbook answer
Video by Kaylee Mcclellan
This textbook answer is only visible when subscribed! Please subscribe to view the answer
Yi Chun Lin
No Related Courses
The Market Forces of Supply and Demand
How Markets Work
Firm Behavior and the Organization of Industry
Markets and Welfare
February 8, 2021
If a consumer spends one fourth of her income on commodity then what is the income elasticity of demand for this commodity
June 17, 2020
Suppose that you are a writer for the blog All Things Chocolate and are writing a post that illustrates how principles from your economics class can be illustrated by the market for chocolate candy bars. You want to include some headlines from recent ne
Consider the following eve…
Suppose that a frost in Fl…
Use a diagram to illustrat…
Florida citrus growers say…
The “thrifty gene” hypothe…
examining the market forces of supply and demand. And we're taking a look at the market for oranges, and we're trying to analyze the effects of the supply and demand for oranges, given that it's recently been discovered that orange is reduced the risk of diabetes. And we know that farmers are using a new fertilizer, which can produce more oranges. So let's start by showing these changes on the supply and demand curves. So this first piece, the fact that oranges reduce the risk of diabetes if consumers are aware of that or are likely to see is our demand curve is going to shift outward right, because people are going to want more oranges if it means that they can improve their health by reducing their risk of diabetes. So our demand curve is going to shift outward. Now, our supply curve. We're gonna be taking a look at that for a second piece. The fact that farmers are using a new fertilizer which allows them to produce more oranges. That means that our supply is going to increase or supply curve is going to shift outward as well. We now have a new supply curve, which gives us a new equilibrium Sitting right in here so we can determine from this is that our quantity is definitely going to increase by some amount and our price. However, it could sit with this picture we just drew. It looks like it says right above our current price. So maybe price increases, but we can't really know for certain. We can't know by how much that supply curve is shifting. Because if we were to draw a new one, let's suppose our supply shifted by a lot. And now our supply curve sits all the way out here. Well, if that were to happen, we're going to see a new equilibrium sitting in here, in which case our price will have fallen down to P two and our quantity will still have increased. So given these shifts right here, we can know that our quantity is going to increase. However, we can't know for certain what's going to happen to our price
View More Answers From This Book
Find Another Textbook
The government has set a price floor on bread. Manufacturers cannot sell loa…
In a typical jury trial, whose duty is it to interpret the law?a.the jud…
In low-income countries, a higher percentage of entrepreneurs are considered…
How do scarce resources influence you personally? What impact does this have…
A price support is a type of a. price floor b. price ceiling c. …
What is a good way to improve credit score?
Time management is an example of a ____.A) skillB) toolC) safety…
When purchasing a vehicle, which of the following would initially offer …
When a company offers consumers the ability to make purchases via a smart ph…
1. Suppose that a small hair styling salon had revenues of $150,000 in a giv…