If a Frost Destroys Much of the Apple Crop,assuming a Positively

question 153

Multiple Choice

If a frost destroys much of the apple crop,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus in the apple market:

• A) will increase.
• B) will decrease.
• C) will not change.
• D) may change,but we cannot determine the change without more information.

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Definitions:

Operating Costs

The expenses associated with the operation of a business, excluding costs associated with production.

Working Capital

The difference between a company’s current assets and current liabilities, indicating its short-term financial health and operational efficiency.

Net Present Value

A calculation used to assess the profitability of an investment, considering the present value of its future cash flows minus the initial investment.

Payback Period

The duration necessary to regain the investment's cost.