Exhibit 39-8

-Refer to Exhibit 39-8.Assume that E₁represents the initial equilibrium in the market for grain X.If all the farmers agree to restrict production and abide by the agreement,

Question

Exhibit 39-8 -Refer to Exhibit 39-8.Assume that E₁represents the initial equilibrium in the market for grain X.If all the farmers agree to restrict production and abide by the agreement,

Quizplus · Accepted Answer

Restricting production will decrease supply, leading to an increase in price (A) and a decrease in equilibrium quantity (B). If demand is inelastic, total revenues will increase as price increases (C).

Exhibit 39-8 -Refer to Exhibit 39-8.Assume That E1represents the Initial Equilibrium in the Initial

Exhibit 39-8 -Refer to Exhibit 39-8.Assume That E₁represents the Initial Equilibrium in the Initial