Chapter 7, Problem 3MCQ

To determine

The question requires us to determine the impact of the salmonella outbreak on the market for tomatoes.

Explanation of Solution

An increase in supply will cause the equilibrium price to fall and the equilibrium quantity to increase.

A salmonella outbreak causes the supply of untainted tomatoes to fall in the market for tomatoes. A fall in supply reduces the equilibrium quantity of tomatoes and increases the equilibrium price in the market for tomatoes.

Therefore, supply will fall, and the price will increase when suppliers face the salmonella outbreak in the market for tomatoes.

Option “a” is correct.