There are one-half million grain farmers in the country producing corn. The best model to analyze this market is

Question

Quizplus · Accepted Answer

The large number of grain farmers and producers of corn imply that the market for corn is highly competitive as there is no single producer with a significant market share. This makes it difficult for individual farmers to affect the market price of corn or exert any market power. In a perfectly competitive market, no single producer can influence the market price, and there is free entry and exit of firms. Therefore, the best model to analyze this market is perfect competition.

There Are One-Half Million Grain Farmers in the Country Producing