In recent years the cost of producing organic produce in the United States has decreased largely due technological advancement. At the same time, more and more Americans prefer organic produce over conventional produce. Which of the following best explains the effect of these events in the organic produce market?A) Both the supply and demand curve have shifted to the right. As a result there has been an increasein both the equilibrium price and the equilibrium quantity B)The supply has shifted to the left and the demand curve has shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on equilibrium price C) The supply curve has shifted to the left and the demand curve has shifted to the right. As a result there has been an increase in the equilibrium price and anuncertain effect on equilibrium qunatity D) Both the supply and demand curves have shifted to the right. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price

Respuesta :

Answer:

Option (D) is correct.

Explanation:

If the cost of producing organic produce decreasing because of technological changes then as a result there is an increase in the supply of organic produce. This will shift the supply curve of organic produce rightwards.

At the same time, if the taste and preferences of the U.S consumers changes towards the organic produce then as a result the demand for organic produce increases. This will shift the demand curve rightwards.

As a result of these shifts, there is an increase in the equilibrium quantity and the effect on equilibrium price is indeterminate because that will be dependent upon the size of the shifts of supply and demand curve.

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