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22
Mar

Principles of Economics ECON1008

Subject: Principles of Economics Code: ECON1008 word limit is 500 words “Lemon shortage and high demand for fresh fruit sends prices skyrocketing” Please read the article attached and answer the questions: 1. Using demand and supply model and assuming that lemons are sold in a perfectly competitive market, explain the reasons for the price of lemon to skyrocket. Please make sure you clearly explain the equilibrating process. [5 marks] 2. Clearly explain and illustrate the impact of the increase in the price of lemon on a substitute good for lemon. In your discussion provide an example and explain the equilibrating process…

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