Assume the market for organic produce sold at farmers' markets is perfectly competitive.All else being equal,as more farmers choose to produce and sell organic produce at farmers' markets,what is likely to happen to the equilibrium price of the produce and profits of the organic farmers in the long run?

Question

Quizplus · Accepted Answer

As more farmers enter the market and increase the supply of organic produce, the equilibrium price is likely to decrease due to the increase in competition. This will lead to lower profits for organic farmers, as they will have to lower their prices to remain competitive. In a perfectly competitive market, profits are driven down to zero in the long run. Therefore, option C is the best choice.

Assume the Market for Organic Produce Sold at Farmers' Markets