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Economics · May / June 2020 · Paper 12 · Question 6

2281Supply

The diagrams show the supply curve for an individual grower of tomatoes and for the total market supply of tomatoes. What explains the similarity of the two curves?

  1. AAs costs rise growers need to get a higher price to increase output.
  2. BAt the lower prices each grower supplies more tomatoes.
  3. CThe profitability per unit is the same for all growers irrespective of output.
  4. DSupply is not always influenced by price.

As printed in the paper

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Correct answer: A. As costs rise growers need to get a higher price to increase output.

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