Scenario 14-3
In March 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,which statement would describe the long-run market supply curve for irradiated grapefruit

Question

Quizplus · Accepted Answer

If marginal transportation costs increase, firms will need to receive a higher price to cover their costs, leading to a higher long-run equilibrium price. This would result in an upward sloping long-run market supply curve for irradiated grapefruit.

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