Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I say the farmer would prefer a market condition in which they are unfavorable, and most farmers harvest small crops because they can sell their

I say the farmer would prefer a market condition in which they are unfavorable, and most farmers harvest small crops because they can sell their wheat for a higher price, increasing their profits. In such a scenario, the overall wheat supply would be limited due to adverse conditions, resulting in a lower total quantity of wheat entering the market. The textbook defines quantity supply as "the amount of a good that sellers are willing and able to sell" (Mankiw, 2021). This limited supply would likely drive up the market price for wheat. As a result, the farmer, who can harvest 3,000 bushels, could sell each bushel at a higher price, maximizing his profit. In contrast, in a market where conditions are favorable and many farmers harvest large crops, the increased supply could lead to a surplus, causing the market price to decrease. In such a situation, the farmer might receive a lower cost per bushel, reducing his overall revenue despite having a larger harvest. thoughts

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental Economics And Policy

Authors: Thomas H Tietenberg

5th Edition

0321348907, 9780321348906

More Books

Students also viewed these Economics questions

Question

How does selection differ from recruitment ?

Answered: 1 week ago