You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The equilibrium output in agricultural markets based on what happens to the price given the change in supply, what do you think will happen to the equilibrium quantity? Will it remain the same, increase or decrease?

You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The equilibrium output in agricultural markets based on what happens to the price given the change in supply, what do you think will happen to the equilibrium quantity? Will it remain the same, increase or decrease?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 14QP

See similar textbooks

Similar questions

You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The number of farms can new firms enter the market? If they can, what will happen to the market supply curve? If they cannot enter, explain.
Which of the following is NOT a requirement for a market to be perfectly competitive?
You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The profits of farmers based on what happens to the price, what do you think will happen to the profits earned by the firms/farmers that previously existed in the market?
Why don't firms in a competitive market have excess capacity in the long run?
Explain why economic profits in all perfectly competitive markets will tend toward zero in the long run. Is this a good thing or a bad thing for producers and consumers? Explain.