Question

the article states: “Production is also at a record high, with the USDA maintaining its forecast…...

the article states: “Production is also at a record high, with the USDA maintaining its forecast… at 15.99 billion bushels. That is up more than 2.3 billion bushels from last year’s total, the result of a record 97 million acres planted this year.” Why wouldn’t farmers jointly agree to reduce the number of acres they planted in order to increase the price of corn?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The market for corn is (almost) perfectly competitive, with large number of sellers and buyers. Each buyer and seller is too small to influence market price, so the sellers are price takers, and accept the market-determined price as their relevant price.

As a result, the firm demand curve is horizontal, being perfectly elastic, at market price. If the farmers reduce output, they will experience only a decrease in revenue, since they do not face a downward-sloping demand curve. Therefore, they have no incentive to jointly agree to reduce output.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
This article illustrates the political economy of international trade and the concept of comparative advantage. Explain...
This article illustrates the political economy of international trade and the concept of comparative advantage. Explain the nations who are the "Winners" and "Losers" (5 points) and why as described in this article, and the effect of "arbitrary government intervention" that circumvents the workings of free trade initiated by Senator Trent Lott as described in the article? Use the economic concept of comparative advantage in your explanation (5 points). Due Jan 15 As a side note - why do a...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
Asia’s e-commerce landscape has been booming in recent years. The swift adoption of smartphones and greater...
Asia’s e-commerce landscape has been booming in recent years. The swift adoption of smartphones and greater access to the internet has allowed consumers in the region to be a major force in the global digital economy. The expansion looks set to continue at a rapid pace. According to a November 2018 report by Fitch Solutions, e-commerce sales in the region are forecast to increase by 14.2% this year, with an estimated average annual increase of 14% over the medium term...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their awareness of internal and external issues? ???ALASKA AIRLINES: NAVIGATING CHANGE In the autumn of 2007, Alaska Airlines executives adjourned at the end of a long and stressful day in the midst of a multi-day strategic planning session. Most headed outside to relax, unwind and enjoy a bonfire on the shore of Semiahmoo Spit, outside the meeting venue in Blaine, a seaport town in northwest Washington state. Meanwhile, several members of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT