Market for sprouts is in long-run equilibrium

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Suppose the market for sprouts is in long-run equilibrium. In the short run, what will happen if there is an E.coli outbreak that causes a decrease in the demand for sprouts?

A) The marginal cost curve will shift downward for each producer, leaving prices unchanged.

B) The market price of sprouts will fall, causing each firm to produce fewer sprouts.

C) Existing firms will expand output to make up for the decrease in demand.

D) The marginal cost curve will shift upward for each producer, causing prices to rise and profits to fall.

Reference no: EM131263676

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