Question

The U.S. Department of Agriculture's (USDA's) minimum general recommendation is five servings of fruits and vegetables a day. Jetter et al. (2004) estimated that, if consumers followed that advice, the equilibrium price and quantity of most fruits and vegetables would increase substantially. For example, the price of salad would rise 7.2%, output would increase 3.5%, and growers' revenues would jump 7.3% (presumably, health benefits would occur too). p. $ per unit Use a diagram to illustrate as many of these effects as possible and to show how consumer surplus and producer surplus change. Discuss how to calculate the consumer surplus (given that the USDA's recommendation shifts consumers' tastes and behavior). 1.) Use the line drawing tool to draw either a new supply curve (s) or a new demand curve (D?) to show how the market would change if consumers followed USDA advice. Properly label this line. Q. Servings of fruits and vegetables 2.) Use the point drawing tool to indicate the new market equilibrium. Label this point 'E, Carefully follow the instructions above and only draw the required objects.

Answer 1

Psci RM A P2 PI New Markt Trira C.s and Lensumer supls arer AE, ME2P anea Suryeus Produar Suplus area 0P.E Tniral Produer areo o P E2 11 Fen al