Hello, I would really appreciate if you could please answer the two scenarios below with supply and demand graph and explanation of price and quantity sold in detail. Please give original answer and not copied from somewhere else. Keep in mind that scenario 2 is a continuation of scenario 1. Thanks in advance.
Scenario 1:
“After prodding from consumer groups, the U.S. Food and Drug Administration conducted their own investigation and is proposing a maximum limit for arsenic levels in apple juice. The FDA plans to limit the amount of inorganic arsenic to 10 parts per billion – the same amount the Environmental Protection Agency allows in drinking water.”
Draw supply and demand graphs to show what might happen to the price and quantity of apple juice in the future when FDA implements this new policy. Label your graphs completely. Be sure to provide a full explanation of your answer in the space provided below.
Scenario 2:
“Assume that at the same time the FDA is implementing the policy described in scenario 3 the FDA also decides to limit the amount of imported apples from overseas (where farmers are still using pesticides in growing apples a major source of inorganic arsenic)”.
Draw supply and demand graphs to show how the implementation of both of these policies (scenario 1 & 2) will impact the price and quantity of apple juice in the future. Label your graphs completely and provide a full explanation for your answer in the space provided below.