The Price Elasticity of Demand for Fresh Tomatoes Has Been

question 128

Multiple Choice

The price elasticity of demand for fresh tomatoes has been estimated to be -2.22.If a new insecticide and fertilizer treatment yields a 20 percent increase in the nation's fresh tomato crop, how will that affect total expenditures on fresh tomatoes, all other things unchanged?

• A) total expenditures will remain unchanged
• B) total expenditures will fall
• C) total expenditures will rise
• D) not enough information is given to answer the question

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