Question

er part ICM ID es apples and pears (a substitute pro ute in production of apples). The price of pears increases. ow the effect of the increase in the pear prices on that shows the arksh e increase in the pear prices on the farmer supply of apples (1 mark) Label propeny teof t rly the axes and curve (1 mark) properly the axes and curve e effect of the increase in prices on the demand of pears (2 marks).

Answer 1

i) supply of apples decreases with increase in price of pears because farmers will shift production from apples to pears to get higher price and profit. As a result supply curve shifts to the left.

ii) there is an upward movement along the demand curve because there is an increase in price of pears.

1) R 下 @wantt afapples 이 peas