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. If the increased production of irradiated tomatoes caused a rise in the marginal transportation costs of moving irradiated tomatoes to market, the

Question

Quizplus · Accepted Answer

In the long run, if marginal transportation costs rise, it increases the cost of supplying tomatoes, leading to an upward sloping supply curve as higher prices are needed to cover increased costs.

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