The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 9, Problem 1CQ

To determine

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Expert Solution & Answer

Explanation of Solution

In the short run, the lower resource price will make profit in the market. This is because in the short run only a small number of firms share the market share and they will sell the product above their average cost. However, in the long run, many firms are sharing the market share because of the non-barriers to entry. Then, the profit in the market becomes zero due to the decrease in demand, which resulted from excess supply of goods. Also, the earnings from the production will only cover the cost. Therefore, lowering the resources price will not change the market profit in the long run. However, it will help the farmers to survive in the market. This is because in the long run, the firms with the highest cost of product can easily drive out from the market.

Economics Concept Introduction

Perfect competitive market: Perfect competition is the market with large number of sellers and buyers dealing with identical products.

Price takers: If a firm is said to be a price taker, it will accept the prevailing price in the market.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Describe the various measures used to assess poverty and economic inequality. Analyze the causes and consequences of poverty and inequality, and discuss potential policies and programs aimed at reducing them, assess the adequacy of current environmental regulations in addressing negative externalities. analyze the role of labor unions in labor markets. What is one benefit, and one challenge associated with labor unions.

Evaluate the effectiveness of supply and demand models in predicting labor market outcomes. Justify your assessment with specific examples from real-world labor markets.

Explain the difference between Microeconomics and Macroeconomics? 2.) Explain what fiscal policy is and then explain what Monetary Policy is? 3.) Why is opportunity cost and give one example from your own of opportunity cost. 4.) What are models and what model did we already discuss in class? 5.) What is meant by scarcity of resources?

Answer 2

Question

Chapter 9, Problem 1CQ

To determine

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Expert Solution & Answer

Explanation of Solution

In the short run, the lower resource price will make profit in the market. This is because in the short run only a small number of firms share the market share and they will sell the product above their average cost. However, in the long run, many firms are sharing the market share because of the non-barriers to entry. Then, the profit in the market becomes zero due to the decrease in demand, which resulted from excess supply of goods. Also, the earnings from the production will only cover the cost. Therefore, lowering the resources price will not change the market profit in the long run. However, it will help the farmers to survive in the market. This is because in the long run, the firms with the highest cost of product can easily drive out from the market.

Economics Concept Introduction

Perfect competitive market: Perfect competition is the market with large number of sellers and buyers dealing with identical products.

Price takers: If a firm is said to be a price taker, it will accept the prevailing price in the market.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 9, Problem 1CQ

To determine

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Expert Solution & Answer

Explanation of Solution

In the short run, the lower resource price will make profit in the market. This is because in the short run only a small number of firms share the market share and they will sell the product above their average cost. However, in the long run, many firms are sharing the market share because of the non-barriers to entry. Then, the profit in the market becomes zero due to the decrease in demand, which resulted from excess supply of goods. Also, the earnings from the production will only cover the cost. Therefore, lowering the resources price will not change the market profit in the long run. However, it will help the farmers to survive in the market. This is because in the long run, the firms with the highest cost of product can easily drive out from the market.

Economics Concept Introduction

Perfect competitive market: Perfect competition is the market with large number of sellers and buyers dealing with identical products.

Price takers: If a firm is said to be a price taker, it will accept the prevailing price in the market.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 9, Problem 1CQ

To determine

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Expert Solution & Answer

Explanation of Solution

In the short run, the lower resource price will make profit in the market. This is because in the short run only a small number of firms share the market share and they will sell the product above their average cost. However, in the long run, many firms are sharing the market share because of the non-barriers to entry. Then, the profit in the market becomes zero due to the decrease in demand, which resulted from excess supply of goods. Also, the earnings from the production will only cover the cost. Therefore, lowering the resources price will not change the market profit in the long run. However, it will help the farmers to survive in the market. This is because in the long run, the firms with the highest cost of product can easily drive out from the market.

Economics Concept Introduction

Perfect competitive market: Perfect competition is the market with large number of sellers and buyers dealing with identical products.

Price takers: If a firm is said to be a price taker, it will accept the prevailing price in the market.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1CQ

To determine

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Expert Solution & Answer

Explanation of Solution

In the short run, the lower resource price will make profit in the market. This is because in the short run only a small number of firms share the market share and they will sell the product above their average cost. However, in the long run, many firms are sharing the market share because of the non-barriers to entry. Then, the profit in the market becomes zero due to the decrease in demand, which resulted from excess supply of goods. Also, the earnings from the production will only cover the cost. Therefore, lowering the resources price will not change the market profit in the long run. However, it will help the farmers to survive in the market. This is because in the long run, the firms with the highest cost of product can easily drive out from the market.

Economics Concept Introduction

Perfect competitive market: Perfect competition is the market with large number of sellers and buyers dealing with identical products.

Price takers: If a firm is said to be a price taker, it will accept the prevailing price in the market.

Answer 6

Chapter 9, Problem 1CQ

To determine

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Expert Solution & Answer

Explanation of Solution

In the short run, the lower resource price will make profit in the market. This is because in the short run only a small number of firms share the market share and they will sell the product above their average cost. However, in the long run, many firms are sharing the market share because of the non-barriers to entry. Then, the profit in the market becomes zero due to the decrease in demand, which resulted from excess supply of goods. Also, the earnings from the production will only cover the cost. Therefore, lowering the resources price will not change the market profit in the long run. However, it will help the farmers to survive in the market. This is because in the long run, the firms with the highest cost of product can easily drive out from the market.

Economics Concept Introduction

Perfect competitive market: Perfect competition is the market with large number of sellers and buyers dealing with identical products.

Price takers: If a firm is said to be a price taker, it will accept the prevailing price in the market.

Answer 7

Chapter 9, Problem 1CQ

To determine

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Answer 8

Expert Solution & Answer

Explanation of Solution

In the short run, the lower resource price will make profit in the market. This is because in the short run only a small number of firms share the market share and they will sell the product above their average cost. However, in the long run, many firms are sharing the market share because of the non-barriers to entry. Then, the profit in the market becomes zero due to the decrease in demand, which resulted from excess supply of goods. Also, the earnings from the production will only cover the cost. Therefore, lowering the resources price will not change the market profit in the long run. However, it will help the farmers to survive in the market. This is because in the long run, the firms with the highest cost of product can easily drive out from the market.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Perfect competitive market: Perfect competition is the market with large number of sellers and buyers dealing with identical products.

Price takers: If a firm is said to be a price taker, it will accept the prevailing price in the market.

Answer 12

Ch. 9 - Prob. 1CQ Ch. 9 - Prob. 2CQ Ch. 9 - Prob. 3CQ Ch. 9 - Prob. 4CQ Ch. 9 - Prob. 5CQ Ch. 9 - Suppose that the development of a new...Ch. 9 - Prob. 7CQ Ch. 9 - Prob. 8CQ Ch. 9 - Prob. 9CQ Ch. 9 - Prob. 10CQ

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

The effect of high cost of machinery, labor, and fertilizers in changing profit of farmers.

Explanation of Solution

Want to see more full solutions like this?

Chapter 9 Solutions