Chapter 5, Problem 2FRQ

To determine

The question requires us to draw the demand curve and show the impact of the new report on demand for apple.

Explanation of Solution

The following graph represents the demand curve for apple:

  

Here, D1 is the initial market demand for apple. After the doctor’s report, the demand for apples will rise because people will buy more apples to stay healthy and stay away from the doctor.

An increase in demand for apples will shift the demand curve rightward from D1 to D2 as shown in the above graph. At the new demand curve, the consumers will buy more apples at a higher price.