Question
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If a farmer must sell all of their daily harvest of vegetables before they spoil for whatever price they are offered, once the vegetables are picked,
the farmer’s price elasticity of supply for fresh vegetables is
a. unable to be determined from this information
b. infinite
c. zero
d. one

Ask by Reese Bryant. in the United States
Jan 27,2025

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Answer

The farmer’s price elasticity of supply for fresh vegetables is zero.

Solution

In this scenario, the farmer must sell all of their daily harvest of vegetables before they spoil, regardless of the price offered. This means that the quantity of vegetables supplied is fixed and does not change with variations in price.
Price Elasticity of Supply (PES) measures how much the quantity supplied of a good responds to a change in the price of that good. It’s calculated as:
Given that the farmer’s quantity supplied remains constant regardless of the price, the numerator (% Change in Quantity Supplied) is zero. Therefore:
A PES of zero indicates perfectly inelastic supply, meaning the quantity supplied does not respond at all to changes in price.
Answer:
c. zero

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Extra Insights

The farmer’s price elasticity of supply for fresh vegetables is b. infinite. This is because the farmer has to sell the vegetables immediately to avoid spoilage, meaning that they will supply any quantity demanded at any price offered. In other words, the supply is perfectly elastic, as the farmer will respond to any changes in market price with unlimited supply, provided the vegetables are fresh.
However, this condition only reflects the short-term response. If we consider the long-term view, the elasticity may change based on factors such as seasonal production cycles or changing consumer preferences, but in this immediate scenario, it’s all about preserving that crisp, fresh produce!

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