The unit quantity standard of a product is 3 pounds per package, and the unit quantity standard for machine hours is 0.40 hours
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Answer:
As a result of half the orange crop being destroyed, there will be a shortage in the supply of oranges. This will shift the supply curve for oranges to the left as shown in the graphic.
Notice that the equilibrium price becomes higher. As a result of this, the Consumer surplus will <u>decrease</u> because they are now paying more than they would like to pay.
The situation will largely be the same in the market for orange juice because orange is the main component for orange juice. Orange juice supply will decrease and the supply curve will shift left.
Prices will rise and Consumer surplus will <u>decrease.</u>
<em>Note: Second graph x-axis is Quantity of orange juice. </em>
