Question 4 Warm and beautiful weather gives Florida a bumper crop of oranges. Wh

Question

Question 4

Warm and beautiful weather gives Florida a bumper crop of oranges. What will happen to the price and quantity of oranges sold in the U.S.?

Equilibrium price falls, equilibrium quantity rises

Equilibrium price falls, equilibrium quantity falls

Equilibrium price rises, equilibrium quantity falls

Equilibrium price rises, equilibrium quantity rises

Equilibrium price falls, equilibrium quantity rises

Equilibrium price falls, equilibrium quantity falls

Equilibrium price rises, equilibrium quantity falls

Equilibrium price rises, equilibrium quantity rises

Explanation / Answer

The correct option is a. Due to bumber crop of oranges the supply curve of oranges shifts to the right and increases the equilibrium quantity while the equilibrium price level falls in the new equilibrium.

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