Suppose the development of new drought-resistant hybrid seed corn leads to a 50-percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the conditions in the corn production industry are approximated by the price-taker model, which of the following is most likely to occur?
a. The price of corn will increase.
b. The price of soybeans (a substitute for corn) will increase.
c. The profits of corn farmers who quickly adopt the new technology will increase.
d. The profits of corn farmers who do not adopt the new technology will increase.
C
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Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price is $15, the firm will
A) shut down. B) leave the market in the long run. C) stay in the market in the long run. D) make an economic profit.
If U.S. citizens decide to purchase more foreign assets at each interest rate, the U.S. real interest rate
a. increases, the real exchange rate of the dollar appreciates, and U.S. net capital outflow decreases. b. increases, the real exchange rate of the dollar depreciates, and U.S. net capital outflow increases. c. decreases, the real exchange rate of the dollar depreciates, and U.S. net capital outflow decreases. d. decreases, the real exchange rate of the dollar appreciates, and U.S. net capital outflow increases.