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natka813 [3]
3 years ago
4

Consider the market for tomatoes as a perfectly competitive market, and suppose it is currently at a long run equilibrium. Then,

suppose the FDA comes out with a favorable report, saying that tomato consumption reduces cancer. Compared to the initial equilibrium, how do the market price and quantity change in the short run?
Business
1 answer:
Luda [366]3 years ago
4 0
Perfectly competitive market is very sensitive. If the price changes, the demand will be 0. Demand curve is horizontal in a perfectly competitive market.
However, if consumers find out it reduces cancer, than demand will increase, this price will increase. Quantity demanded will increase; market price will also increase
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strojnjashka [21]

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see below

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