The cherry farmers have had a very bad year due to drought and bush fires last summer. At the same time, increasing numbers of people look forward to having cherries in the summer season at Christmas time.

1.a). What are the factor(s) affecting the supply of cherries?

1.b). What are the factor(s) affecting the demand of cherries?

1.c). As a result, how will this affect the demand curve and supply curve?

1.d). Demonstrate using a Supply / Demand diagram, what would happen in the ultimate change in equilibrium price (Pe) and quantity (Qe) for cherries.Label the axes and the curves

1.e). What type of market structure is the cherry industry in Australia according to the above information? Explain.

1.f).Calculate the price elasticity of cherries.