Suppose a farmer earns a larger profit than the "normal profit" by producing a specialtype of vegetable that becomes popularO other farmers arc likely to plant the same vegetable, pushing up the prevailing market price.O the firm will continue to carn its 'normal profits" far into tho future.O the farm's owners are likely to withdraw from the industry in order to retire carly.other farmers are likely to plant the same vegotablo, pushing down the prevailing marketprice.

Answer: If by selling a particular good firms are earning large profits then other firms will also…

Suppose a farmer earns a larger profit than the "normal profit" by producing a special type of vegetable that becomes popular other farmers are likely to plant the same vegetable, pushing up the prevailing market price. the firm will continue to earn its "normal profits" far into the future. the farm's owners are likely to withdraw from the industry in order to retire early. O pther farmers are likely to plant the same vegetable, pushing down the prevailing market price.

Suppose a farmer earns a larger profit than the "normal profit" by producing a special type of vegetable that becomes popular other farmers are likely to plant the same vegetable, pushing up the prevailing market price. the firm will continue to earn its "normal profits" far into the future. the farm's owners are likely to withdraw from the industry in order to retire early. O pther farmers are likely to plant the same vegetable, pushing down the prevailing market price.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 1SCQ: Firms ill a perfectly competitive market are said to be price takers that is, once the market...

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