If good weather conditions result in a larger than normal crop of peaches,then the
A) equilibrium price of peaches rises, and the equilibrium quantity of peaches increases.
B) equilibrium price of peaches falls, and the equilibrium quantity of peaches increases.
C) demand curve for peaches shifts leftward.
D) increase in the supply of peaches induces a greater demand for peaches, so that the equilibrium price rises and the equilibrium quantity increases.
E) equilibrium price of peaches falls, and the equilibrium quantity of peaches decreases.

Question

Quizplus · Accepted Answer

When there is a larger than normal crop of peaches, the supply of peaches will increase. This will shift the supply curve to the right, causing a surplus of peaches at the previous equilibrium price. In order to clear this surplus, the price of peaches will need to fall until the quantity demanded increases to match the new quantity supplied. Therefore, the equilibrium price of peaches falls, and the equilibrium quantity of peaches increases, making option B the correct choice.

If Good Weather Conditions Result in a Larger Than Normal