9. Problems and Applications Q9 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. Show the effect of these two events on the market for oranges.

Question

Rafael Landry

Mathematics

22 September, 13:34

9. Problems and Applications Q9 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. Show the effect of these two events on the market for oranges.

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Georgia Castaneda · Answer 1

Step-by-step explanation:

The news of the increased health benefits from consuming oranges will increase the demand for oranges whilst increasing both the equilibrium price and also the quantity.

The supply of oranges will also increase, if the new fertilizer that makes orange trees produce more were used by the farmer, leading to a fall in the equilibrium price but a rise in the equilibrium quantity.