Assume the market for organically-grown produce is perfectly competitive. All else equal, as farmers find it less profitable to produce and sell organic produce in this market,

Question

Quizplus · Accepted Answer

As farmers find it less profitable to produce and sell organic produce, they will decrease their supply of organic produce, causing the supply curve to shift to the left. This will lead to an increase in the equilibrium price, as the demand for organic produce remains the same. Since the question says "All else equal", there is no reason to assume a shift in the demand curve. Therefore, option B is the correct answer.

Assume the Market for Organically-Grown Produce Is Perfectly Competitive