Orange juice producers are dismayed and puzzled. An economist told them that the reason the demand for orange juice fell is that a new technology allow tomato producers to pick ripe tomatoes more quickly, with less damage and at lower cost. Can you make the connection?
Answer to relevant QuestionsProfessor Carrie Meyer of George Mason University presents her students with the following scenario: "Suppose a frost destroys much of the coffee harvest in Colombia. Show why equilibrium price and quantity change. Suppose, ...The following are the various demand and supply schedules for pizza. Let's start by assuming that the demand and supply on the pizza market are D2 and S2. (a) What is the equilibrium price and quantity of pizza? (b) Now ...Why are we relatively insensitive to price changes affecting low-priced goods such as bubble gum? Economic consultants to razor and razor blade producer Gillette advise the company to sell their razors below cost. What economic rationale explains the advice? How can proponents of a more equitable distribution of income use the law of diminishing marginal utility of money to justify their position?
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