Responses to Higher Soybean Prices. Suppose that in initial equilibrium in the soybean market, each of the 1,000 farmers produces 50 units, for a total of 50,000 units of soybeans. Suppose the price of soybeans increases, and everyone expects the price to stay at the higher level for many years.
a. Arrows up or down: Over a period of several years, we expect the quantity of soybeans supplied to __________ as the number of soybean farmers __________ and the output per farmer __________.
b. A farmer who enters the market is likely to have a (higher/lower) marginal cost of production than an original firm
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