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Local market for strawberries in california

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Reference no: EM131222776

Consider a local market for strawberries in California and assume that the supply and demand functions are given by

Qd = 15 - 9p

Qs = 5 + p.

Due to the current drought, irrigation prices are higher which rises the firms' cost and shifts supply to the left. Which of the following statements is true?

A. After this change consumers' expenditures on strawberries increase.

B. After this change consumers' expenditures on strawberries decrease.

C. After this change consumers' expenditures on strawberries increase by 55%.

D. After this change consumers' expenditures on strawberries decrease by 30%

E. None of the above.

Reference no: EM131222776

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