Question

The Davis family grows organic vegetables to sell at a local farmer’s market. Which are factors that directly affect their profit? Check all that apply.

an increase in the cost of farm equipment
a rise in demand for organic produce
an increase in customers at the market
a change in the market price for non-organic fruit
a sale on organic meats at the market

Answer 1

Check the first three:

- an increase in the cost of farm equipment — Yes. (Raises their production costs, reducing profit.)
- a rise in demand for organic produce — Yes. (Increases quantity sold and/or price, raising revenue and profit.)
- an increase in customers at the market — Yes. (More potential buyers → higher sales and revenue.)

Do not check the last two (they affect profit only indirectly):
- a change in the market price for non-organic fruit — No (only affects Davis’s sales if it changes substitution patterns).
- a sale on organic meats at the market — No (may influence foot traffic or spending patterns, but not a direct change to Davis’s costs or prices).