Suppose a Frost Destroys the Tomato Crop in California but Farmers

question 75

Multiple Choice

Suppose a frost destroys the tomato crop in California but farmers see an increase in their revenues.Which of the following best explains this?

• A)The decrease in supply led to huge price increases.
• B)Tomatoes are necessities.
• C)The demand for tomatoes is price inelastic.
• D)The cross-price elasticity between tomatoes and most other substitute vegetables is very low.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without having full control over it, typically implicated by ownership of 20% to 50% of voting shares.

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated by assets minus liabilities, often used to assess if a company's stock is under or overvalued.

Fair Value

The assessed financial value of an asset or liability, reflecting current market prices in an open and competitive environment.

Significant Influence

Significant Influence is the power to participate in the financial and operating policy decisions of an investee, but not control them, typically associated with ownership of 20% to 50% of voting shares.