2. [5 pts] 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.
1 answer:
Answer:
there would be a rise in equilibrium quantity and an indeterminate effect on equilibrium price
Explanation:
as a result of the scientists revelation, the demand for oranges would increase and so would the price.
as a result of the new fertilisers been used, the supply of oranges would rise and price would fall.
taking these two occurrences together, there would be a rise in equilibrium quantity and an indeterminate effect on equilibrium price
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