Assume that the farmers know that their revenues would increase if each would take a certain amount of acreage out of production.An agreement to do so
A)would not be made because the farmers have no incentive to enter into it.
B)would not be made because it would contradict the assumption that farmers are profit maximizers.
C)probably would not be adhered to,if made,because it would be disadvantageous for the farmers as a group.
D)probably would not last,if made,because each farmer would have an incentive to break it.

Question

Quizplus · Accepted Answer

The assumption that farmers are profit maximizers implies that each farmer would have an incentive to break the agreement if it becomes more profitable for him/her to do so. Therefore, even if an agreement were made, it would probably not last.

Assume That the Farmers Know That Their Revenues Would Increase