Question 2

a) Organic produce market

When the cost of producing organic produce has decreased due to technological
advancement, this causes the supply of organic produce market to increase. Hence, the supply
curve will shift to the right, which is from S1 to S2. At the same time, when the demand for
organic produce increases, it causes the demand curve to shift to the right, which is from D1
to D2. As a result, the equilibrium quantity will increase from Q1 to Q2 but the effect of
equilibrium price is uncertain. It can be increasing, decreasing or remain the same. This is
because the distance of shifting both demand and supply curve is also uncertain.

b) Conventional produce market

When people demand more organic produce, the demand for conventional produce will
decrease and causes the demand curve to shift to the left, which is from D1 to D2. Hence, the
quantity supplied will decrease from Q1 to Q2.