December 3, 2019
Questions
- What are some reasons for falling milk prices?
- What characteristics of the milk market suggest that the market is perfectly competitive?
- Why are some milk farmers exiting the market? Why do these farmers choose to leave the market rather than temporarily shut down?
- What do you expect will happen to the economic profit of the milk farmers who remain in the market?
- Draw a diagram to illustrate your answer to #4.