Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number

Question

3 years ago

8

Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number

of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.
a) raises; increases
b) probably changes, but more information is needed to determine if it rises or falls; increases
c) raises; probably changes, but more information is needed to determine if it increases or decreases
d) lowers; probably changes, but more information is needed to determine if it increases or decreases
e) lowers; increases

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1 answer:

valentina_108 [34] · Answer 1 · 2022-03-26T01:19:49+03:00

Answer:

The correct answer is D

lowers; probably changes, but more information is needed to determine if it increases or decreases

Explanation:

The increase in suppliers for strawberries causes the supply curve to shift to the right causing the equilibrium price to lower fro Po to P1.

The increase of price for Kiwis will move the price from Po to P1. The new price is not at equilibrium, as there has not been a shift in demand or supply as shown in the diagram.