Scenario 14-3
In March of 2000 a study sponsored by the Food Consumer Safety Board found that consumption of irradiated grapefruit increased the health of laboratory rats. As a result of national press coverage of the report, the demand for irradiated grapefruit increased dramatically. Organic farmers were able to switch from organic production of grapefruit to irradiated production with no additional cost. Assume that the grapefruit market satisfies all of the attributes of perfect competition.
-Refer to Scenario 14-3.If the increased production of irradiated grapefruit caused a rise in the marginal transportation costs of moving irradiated grapefruit to market,the

Question

Quizplus · Accepted Answer

In the long run, if marginal transportation costs increase, it would lead to higher costs for producers, causing the long-run market supply curve to slope upward as higher prices would be needed to cover these increased costs.

Scenario 14-3 In March of 2000 a Study Sponsored by the Food