subject: MANAGERIAL ECONOMICS

During the Spring of 2020, farmers across Shangri-la Country protested low prices of soy bean caused by the government's move away from farm crop subsidy programs toward more heavy reliance on market-determined prices for agricultural commodities. The Shangri-La Newspaper reported that the farmers demanded "a fair price for their soy bean, which covers at least their production cost and some profit margin." The Shangri-la Minister of Agriculture responded, "What farmers need to do is produce less."

i) Although in economics there is no such thing as a "fair" price, how might market determined prices be considered "fair" in an economic sense?

ii) Why don't farmers take the Minister's advice and just produce less soy bean?