All else the same, when the price of apples rises, apple producers will have an incentive...

All else the same, when the price of apples rises, apple producers will have an incentive to plant more apple trees.

True or False?

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Expert Solution

All else the same, when the price of apples rises, apple producers will have an incentive to plant more apple trees. It is true.

Because when price of apple rises then the apple producer will always have incentive to produce more and more apple and sell it. So to produce more and more apple producer want to plant more and more apple trees. Because this plantation of apple trees will give him an opportunity to produce more apple. Though there is already apple trees. If the price rises the producer of apple will always get incentive. Though the production will not come immediately but there can be a scope of more production in near future. If the price rise continues then the producer can get. So there will be an incentive to plant more apple trees though the outcome in terms of production will not come quickly. There is always a lag of plantation of trees and its production. But producer get incentive to produce more on the expection that he or she will get higher price for the product.

Rahul Sunny answered 1 year ago

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