You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The profits of farmersbased on what happens to the price, what do you think will happen to the profits earned by the firms/farmers that previously existed in the market?

Perfect competition is many sellers dealing in commodity which is same in quality and price at which…

Answered: You read in a business magazine that…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following?

The profits of farmers

based on what happens to the price, what do you think will happen to the profits earned by the firms/farmers that previously existed in the market?

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