Illustrating graphically and specifying the assumptions upon which your reasoning is based describe briefly
1. The effect on the price and output of fresh maize of advese whether condition
2. The effects on the price and output of oranges of an increase in consumers income.
1. Effect on the price and output of fresh maize of adverse weather conditions:
Illustration:
Assumption: The inverse relationship between price and quantity supplied is based on the law of supply, assuming other factors remain constant.
In this scenario, adverse weather conditions such as drought or floods can significantly impact the production and supply of fresh maize.
Graphically, this can be depicted as a leftward shift of the supply curve of fresh maize.
As a result, the supply of fresh maize decreases, shown by a new supply curve. This leads to a decrease in the quantity of fresh maize supplied and an increase in its price.
The decrease in supply and increase in price are shown as a movement along the demand curve, reflecting a decrease in quantity demanded due to the higher price.
Overall, adverse weather conditions reduce the output of fresh maize, leading to a decrease in supply, an increase in price, and a decrease in quantity demanded.
2. Effects on the price and output of oranges of an increase in consumer income:
Illustration:
Assumption: The positive relationship between price and quantity demanded is based on the law of demand, assuming other factors remain constant.
When there is an increase in consumer income, the demand for oranges tends to rise due to increased purchasing power.
Graphically, this can be shown as a rightward shift of the demand curve for oranges.
As a result, the demand for oranges increases, leading to an increase in both the price and quantity of oranges.
The increase in demand and price are shown as a movement along the supply curve, reflecting a higher quantity supplied due to the increased demand and higher price.
Overall, an increase in consumer income leads to an increase in the output and price of oranges, as the demand for oranges rises.