The supply of dragon fruit is very elastic in the short run. Please draw a diagram that shows how the equilibrium price and quantity change as demand changes due to a food safety scare affecting American cucumbers, which are a substitute in consumption. Label the axes and the prices and quantities both before and after the supply change. Then, write a few sentences explaining what happened to prices relative to quantities and why. 2.
The supply of dragon fruit is very elastic in the short run. Please draw a diagram that shows how the equilibrium price and quantity change as demand changes due to a food safety scare affecting American cucumbers, which are a substitute in consumption. Label the axes and the prices and quantities both before and after the supply change. Then, write a few sentences explaining what happened to prices relative to quantities and why. 2.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I am needing help with graphing number 2. I graphed it but I just need to check it as I am having trouble understanding it
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Step 1.
When a food safety scare affects cucumbers, demand for cucumber decreases, and demand for dragon fruit, a substitute, increases. Demand curve for dragon fruit shifts rightward, increasing its price and increasing its quantity.
In following graph, D0 and S0 are initial demand and supply curves, intersecting at point A with initial price P0 and quantity Q0 (as supply is very elastic, S0 is flatter than D0). Higher demand shifts D0 right to D1, intersecting S0 at point B with higher price P1 and higher quantity Q1.
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