After you have studied Reading Between the Lines on pp. 292–293 answer the following questions.

a. What are the features of the global market for corn that make it competitive?

b. If the increase in production during 2009 and 2010 was due entirely to good weather, what will happen to the price and quantity produced when normal weather returns?

c. What will happen to an individual farmer’s marginal revenue, marginal cost, average total cost, and economic profit if the events in part (b) occur?

d. If the increase in production during 2009 and 2010 was due mainly to a revolution in farm technology, what will happen to the price and quantity produced when normal weather returns?

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READING BETWEEN THE LINES Perfect Competition in Corn Bumper Harvests Bring Stability http://www.ft.com June 1, 2010 There is no better fertilizer than high prices, the old farming adage goes. Trends in agricul- ture appear to be proving this resoundingly true. The spike in prices that caused the first global food crisis in 30 years in 2007-08 has led to large increases in production of foods such as corn and wheat. Farmers have responded to higher prices.... The U.S. Department of Agriculture said ... "Higher prices, and thus expanded acreage, in combination with favorable weather, have helped production expand sharply." Global corn production will hit 835m metric tons in the 2010-11 season, its highest ever level, the USDA forecasts.... That is likely to lead to a period of relatively stable prices.... While prices for the main food and feed grain crops-corn, wheat, and soybeans are likely to remain steady and low in the next year or so, that does not mean a repeat of the food crisis is impossible....