3.4 The U.S. Department of Agriculture’s (USDA)

minimum general recommendation is five servings of fruits and vegetables a day. Jetter et al. (2004)

estimated that if consumers followed that guideline, the equilibrium price and quantity of most fruits and vegetables would increase substantially. For example, the price of salad would rise 7.2%, output would increase 3.5%, and growers’ revenues would jump 7.3% (presumably, health benefits would 344 CHaPTEr 9 Applications of the Competitive Model occur as well). Use a diagram to illustrate as many of these effects as possible and to show how consumer surplus and producer surplus change. Discuss how to calculate the consumer surplus (given that the USDA’s recommendation shifts consumers’

tastes or behavior).