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MMLU / The apple market is in equilibrium. Suppose we observe that apple growers are…

Problem

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question

The apple market is in equilibrium. Suppose we observe that apple growers are using more pesticides to increase apple production. At the same time, we hear that the price of pears, a substitute for apples, is rising. Which of the following is a reasonable prediction for the new price and quantity of apples?

choices

  1. Price rises, but quantity is ambiguous.
  2. Price falls, but quantity is ambiguous.
  3. Price is ambiguous, but quantity rises.
  4. Price is ambiguous, but quantity falls.

subject

high_school_microeconomics

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