How does a decrease in the demand for wheat ultimately lead to normal profits for wheat growers in the long run?
What will be an ideal response?
If the demand for wheat decreases, the price of wheat falls and many wheat farmers incur economic losses. These losses lead to some farmers shutting down their operations. As these farmers exit the market, the supply of wheat decreases. A decrease in the supply of wheat pushes wheat prices back u
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Suppose the market supply curve is p = 5 + Q. If price increases from 10 to 15, the change in producer surplus is
A) 12.5. B) 5. C) 50. D) 37.5.
Which one of the following would cause a rightward shift in the demand curve of digital cameras?
A) Digital cameras become easier to use. B) The price of digital cameras decreases. C) Production methods are modified to make production of digital cameras more efficient. D) Government regulations are imposed to limit the number of digital cameras imported.
Which of the following would cause a decrease in aggregate demand?
A. a rise in wages B. an increase in the price level C. an increase in the money supply D. a fall in investor confidence
The production of capital goods, which are then used to produce consumer goods, is called
a. efficient production b. intermediation c. time preferences d. roundabout production e. derived production