Scenario 14-5 A Study Sponsored by the Food Consumer Safety Board Found

question 402

Multiple Choice

Scenario 14-5
A study sponsored by the Food Consumer Safety Board found that consumption of irradiated tomatoes increased the health of laboratory rats. As a result of national press coverage of the report, the demand for irradiated tomatoes increased dramatically. Organic farmers were able to switch from organic production of tomatoes to irradiated production with no additional cost. Assume that the tomato market satisfies all of the assumptions of perfect competition.
-Refer to Scenario 14-5. As a result of the increase in the demand for tomatoes, we would predict that in the short run that the

• A)production of tomatoes would be at efficient scale.
• B)price of tomatoes would rise.
• C)total cost for existing irradiated tomato producers must rise.
• D)number of firms in the market would fall as prices fall and firms exit the market.

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