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Figure: Shifts in Demand and Supply
-(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose a fall frost destroys one-third of the nation's orange crop. Which panel BEST describes how this will affect the market for vitamin C tablets, which are a substitute in consumption for oranges?
A)panel A
B)panel B
C)panel C
D)panel D

Question

Use the following to answer questions:
Figure: Shifts in Demand and Supply 
-(Figure: Shifts in Demand and Supply) Look at the figure Shifts in Demand and Supply. The figure shows how supply and demand might shift in response to specific events. Suppose a fall frost destroys one-third of the nation's orange crop. Which panel BEST describes how this will affect the market for vitamin C tablets, which are a substitute in consumption for oranges?
A)panel A 
B)panel B 
C)panel C 
D)panel D

Quizplus · Accepted Answer

The fall frost destroys one-third of the nation's orange crop, which will reduce the supply of oranges and shift the supply curve to the left. As a result, the price of oranges will increase, and the quantity demanded for oranges will decrease. Since vitamin C tablets are a substitute in consumption for oranges, the decrease in the price of oranges will lead to an increase in the demand for vitamin C tablets, shifting the demand curve to the right.

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