Question

IV. Changing Supply and Demand at the same time Use graphical analysis to get a conclusion about what would be the new equilibrium (quantity and price in the US market for orange juice, two events occur at the same time. HINT: Identify the three possible scenarios) A colder winter than usual destroyed 70% of the orange harvest in Florida, the primary producer of orange in the US. The National School Lunch Program (NSLP) is folding the ration of orange juice in all schools across the country to increase the supplement of vitamin C in kids 12 years and younger When Supply and Demand both change at the same time, we have three possible scenarios i Demand Change Supply Change i. Demand Change < Supply Change . Demand Change > Supply Change Template. A Simultaneous Increase in Supply and Demand. Case: Supply Conclusion:

Answer 1

у Restruction of the harvest will reduce cuantity supplied - price level and thus lead to leftward shift of he orange orange juice supply curve. This will increase the demand of orange juices a and curve for orange juces will shift right wa Demand Change - supply change when the shift is equal, then equilibrium brice will increase Price and equilibrium Quantity will at remain constant. Q Quantity (11) Demand Change < supply change In this case, new equilibrium occurs at point Es, where equilibrium price has inhas and equilibrium Quantity has fallen to - odg. Quice incre sed sl duantite a (ilij Demand change > supply change yo At new equilibrium point Ea the equilibrium price level has in increased and equilibrium Quantity has also increased brick ay it Quantity