Explore BrainMass
Share

Explore BrainMass

    Analyzing Price and Non-Price factors

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    See the attached file.

    Illustrate each of the following events using a demand and supply diagram for bananas

    -Reports surface that imported bananas are infected with a deadly virus.

    -Consumers incomes drop.

    -The price of bananas rises.

    -The price of oranges falls.

    -Consumers expect the price of bananas to decrease in the future.

    © BrainMass Inc. brainmass.com October 9, 2019, 11:12 pm ad1c9bdddf
    https://brainmass.com/economics/general-equilibrium/analyzing-price-nonprice-factors-248447

    Attachments

    Solution Preview

    Please refer attached file for complete solution. Graphs are missing here.

    Solution:

    Reports surface that imported bananas are infected with a deadly virus.

    I assume that there is no way out to distinguish between an imported banana and a domestically grown banana.Such reports will make the consumers' to switch over to other products because of the health concerns. So, demand for bananas will fall. New equilibrium price and quantity will be lower than earlier. Fall is equilibrium quantity and prices will be quite ...

    Solution Summary

    Solution describes the effect of given situations on demand and supply of bananas with the help of suitable graphs.

    $2.19