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AP® Microeconomics

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Supply and Demand: Lemon Market

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The graph below represents a perfectly-competitive market for lemons. Lemons are a normal good.

Jane Schaefer. Created for Albert.io. Copyright 2016. All rights reserved.

Which of the following could explain an increase in the equilibrium quantity in this market from Q1 to Q3?

A

Consumer incomes have increased, and diseases have destroyed half of the world's lemon trees.

B

The price of limes, a substitute for lemons, has decreased, and the price of a fertilizer used in growing lemons has decreased.

C

The demand for lemonade made with real lemons has increased, and a newly invented machine decreases the cost of harvesting lemons.

D

Consumer incomes have decreased, and the number of farmers growing lemons has increased.

E

The Surgeon General discovers that lemons can aid weight loss and improve overall health, and the supply of oranges, a complement for lemons, increases.