The accompanying graph represents a hypothetical corn market. Suppose a significant number of corn farmers react to market prices in a manner indicated by the Washington Post article "The Downsides of Cheap Corn."
Corn Market
a. Illustrate how the change in the number of farmers impacts the corn market in the accompanying graph.
b. What happens to the equilibrium price after the shift?
Inconclusive.
Price increases.
Price decreases.
Price stays the same.
Quantity (bushels)
What happens to the equilibrium quantity after the shift?
Quantity decreases.
Quantity increases.
Inconclusive.
Quantity stays the same.