there is equilibrium in the purely competitive market for oranges and the optima

Question

there is equilibrium in the purely competitive market for oranges and the optimal amountn of oranges is being produced. explain if and how the optimal amount of oranges will change if the following events occur:

a. new fertilizers increase the yields of orange trees

b. frost destroys part of the orange crop

c. frost destroys part of the grapefruit crop. the resulting increase in the price of grapefruits raises the demand for oranges

d. people get tired of oranges

* when the events in the above problem occur how does the market system signal that something has changed and how does it provide incentives for people to behave in constructive ways ?

Explanation / Answer

B

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