Orange, Lemon, Lime (Citrus fruits) illustrate market dynamics

If you were to study gravity, you’d want nearly a perfect Zero-G enviroment and then introduce 2 spheres. It would give the ideal experimental result by removing all other noisy variables that you’d find in the real world.

Enter the Lemon…

If one were to think about how multiple items are produced and purchased. I suggest that the 3 citrus fruits Oranges / Lemons / Limes offer a nearly perfect study.

  • They are grown the same, and can even both grow on a single tree through grafting, thus have a nearly equivalent cost of opportunity to produce/farm
  • They have descending popularity: Oranges –> Lemons > Limes, and possibly grapefruit, which shows the substitution of one good for another when oversupply or increased competition crowd out the highly popular item. Why would anyone go into lemon farming, it reflects the supply demand and switching decisions of one versus another
  • Their shelf life, care, transport is all nearly identical.
  • A number of variables ‘cancel’ out, thus showing true to life market fundamentals. Creates a standard unit, like a container ship or volume units… Something unchanging.

Just a thought but wanted to suggest… Citrus fruits to study substitution effects for producers based on demand.

**it also appears that many other fruits can be grafted onto a tree (up to 40 types from some articles) so interesting to consider**