Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 4 - Part II - The Market Forces of Supply and Demand - Problems and Applications - Page 87: 9

Answer

These two events that will lead to both increase supply and increase demand. This will result in both the supply curve and the demand curve shifting to the rightward. However, we don't know how much either curve will shift, this will result in a new equilibrium price that is similar to the previous equilibrium price.

Work Step by Step

As per the new finding by the scientist, we get to know that the consumption of oranges decreases the risk of diabetes. So, as a result, the demand for oranges increases at each price level. Graphically, we get to know that the demand curve will shift rightward. Whereas, The farmer uses new fertilizers which makes oranges more productive. As a result, there will be more oranges which ultimately leads to an increase in supply at each price level. Graphically, we get to know that the demand curve will shift rightward.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.