Suppose, ceteris paribus, that the Environmental Protection Agency requires that

Question

Suppose, ceteris paribus, that the Environmental Protection Agency requires that agricultural run-off water must be stored and cleaned prior to release in Florida and simultaneously, due to favorable growing conditions, there is a bumper crop of California oranges. Which of the following statements is correct? a. The price of Florida oranges will increase and the quantity will decrease. b. The price of Florida oranges may increase and the quantity may decrease. c. The price of Florida oranges may decrease and the quantity will decrease. d. The price of Florida oranges will not change but the quantity will decrease. e. the price of Florida oranges may decrease and the quantity may increase.

Explanation / Answer

b. The price of Florida oranges may increase and the quantity may decrease. because now due to bumper crop of California orange and both areclear substitute pepole will buy california orange ,

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