( 10 POINTS ) ( 5 POINTS ) The Food and Drug Administration (FDA) announces that
ID: 1224129 • Letter: #
Question
(10 POINTS)
(5 POINTS) The Food and Drug Administration (FDA) announces that eating a clove of garlic a day can help prevent heart disease. Using a demand and supply graph, explain what happens to equilibrium price and equilibrium quantity of garlic because of this “event”. You must submit a demand-supply graph supporting your answer. You can draw it on the computer or you can send me a scanned copy or digital photo of your hand-drawn graph. Make sure you label the graph appropriately.
(5 POINTS) Suppose that in addition to the event described in Part (a), bad weather has resulted in widespread crop losses. Using the SAME demand and supply graph, explain what happens to equilibrium price and equilibrium quantity of garlic as a result of both “events” occurring at the same time.
Explanation / Answer
the supply comes down drastically where as the demand goes up and also prices
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