Suppose favorable weather resulted in a bumper crop of oranges in Florida.In the market for oranges
A)the supply curve shifted to the right resulting in a decrease in the equilibrium price.
B)the supply curve shifted to the right resulting in an increase in the equilibrium price.
C)the demand curve shifted to the left resulting in a decrease in the equilibrium price.
D)the demand curve shifted to the right resulting in an increase in the equilibrium price.

Question

Quizplus · Accepted Answer

An increase in the supply of oranges, as stated in the question, would shift the supply curve to the right. This means there is now a greater quantity of oranges available at every price level. As a result, the equilibrium price would decrease (moves down the demand curve) as producers would need to lower prices to make sales in the face of greater competition with more supply available. Therefore, Choice A is the correct answer.

Suppose Favorable Weather Resulted in a Bumper Crop of Oranges