Scenario 14-4
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 14-4.As a result of the increase in the demand for tomatoes,we would predict that in the short run that the

Question

Quizplus · Accepted Answer

With an increase in demand, the price of tomatoes in the short run would rise due to the fixed supply of irradiated tomatoes. Organic farmers switching to irradiated production would not affect the supply of tomatoes in the short run. With perfect competition, firms would still be producing at the efficient scale and exiting the market would not be a result of the increase in demand. Total cost for existing producers may or may not rise depending on the specifics of their production costs.

Scenario 14-4 A Study Sponsored by the Food Consumer Safety Board Found